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Full text of "Report of the Commission to investigate charges of fraud and corruption, under act of Assembly, session 1871-'72"

REPORT 



OF THE 



COMMISSION 



TO INVESTIGATE 



CHARGES OF FRAUD AND CORRUPTION, 

UNDER ACT OF ASSEMBLY, 
Session 1 8 7 l-'7 2. 



^» ♦ ♦' 



COMMISSIONERS: 

Hon. W. M. SHIPP, Chairman. 
Hon. J. B. BATCHELOR, 
Gen. JAS. G. MARTIN. 



-♦♦-•-♦i 



RALEIGH: 

JAME8 II. MOORE, STATE PRINTER AND BINDER. 

1872. 
Checks 

R/lair S .» J -> 




Ithi 

I UBLIC . 



ASTOR, IF* 
TH.D1N FOUNDATtONS. 
1898 



Doc. Kb. 11.] [Sess. 1S71-'T2. 

Ordered to le printed. 
James H. Mooke, State Printer and Binder. 



REPORT OF THE COMMISSION TO INVESTIGATE 
CHARGES OF FRAUD AND CORRUPTION. 

To the General Assembly of the State of JVorth Carolina : 

Gentlemex : The Commission appointed under an act of 
the General Assembly, entitled "An Act Creating a Commis- 
sion to Inquire into charges ot Corruption and Fraud," ask 
leave to submit the following report : 

The Commission organized formally on the 21st day of 
March, 1S71, and had a full consultation as to the extent and 
nature of the duties imposed upon them, and the plans to be 
pursued. They found from an examination of the act creating 
the Commission that the scope of their investigation was of a 
most comprehensive character, inviting an inquiry into a dis- 
position of all the bonds, or their proceeds, issued to various 
Railroad Companies since May, 1865, as well as an inquiry 
into all charges ot bribery and corruption against every official 
of the State, and against every officer of every corporation in 
which the State has had or has any interest. 

The Commission entered upon the discharge of their duties 
with a desire to give a full and thorough investigation of all 
the matters submitted to them, and if they fail to meet the 
expectations of your honorable body, or of the people at large, 
it cannot be attributed to the absence of an honest and earnest 
effort to do their duty. The field was an extensive one. 



] >■- i mini No. 11. [Session 

Public opinion had been excited upon these subject for some 
A Commission bad been previously appointed and 
Bide a report to the Legislature. Various charges of fraud 
ami official venality had been made against officers of the State 
eminent, members of the Legislature and other persons. 
The Commission, with a view of probing these matters to the 
bottom, have summoned and examined more than one 
hundred wits . and present their testimony covering more 
than seven hundred pages of manuscript. They have endea- 
vored to do justice fully in each individual instance where a 
charge of eorruption, or implication in it, has been made, and 
have given the individual an opportunity of being heard. 
The Commission have not held their sessions continuously, but 
-lit various times, finding that such a course would best promote 
the object of their inquiries. 

With a few exceptions, they have had little difficulty in pro- 
curing the attendance of witnesses, and have obtained answers 
to interrogatories propounded, with two exceptions which are 
en in a subsequent part of this report 
In presenting this report, the Commission has not thought 
it their province to enter upon a discussion of the facts, nor 
to .-' inclusions. They have forborne to do so, except in 

ttter of the Cape Fear Navigation Company, in which 
they were specially reqti to do so by a resolution oi the 

Gei A jembly. In the absence oi all testimony upon 

special matters, they have felt authorized to so declare. 

tnony is presented and arranged under different 

matter of inquiry. In many 

. I he evi i einbra her subjects than 

that i: ' being impossible to si | it into differenl 

.1 witni called upon to testify upon many 

■ 

ission would further beg leave to say: that 

although the} have summoned and examined, so far as came to 

! . every person whose name has 1 e in connected 

th transactions in the special tax bonds, as well as every 



1871-'T2.] Document No. 11. 3 

subject referred to them, and who was in reach of their pro- 
cess, yet a thorough ventilation of these matters cannot be 
had without the testimony of various persons beyond the 
limits of the State. It is true that the act authorized them to 
issue commissions to take depositions. But in addition to cer- 
tain technical difficulties, which must suggest themselves to 
every one familiar with legal proceedings, the Commission 
thought that in a matter so complicated, little or nothing sat- 
isfactory could be accomplished in this way, and they would 
venture to suggest that if the Legislature desire to prosecute 
this inquiry further, they send a special agent to New York 
city and other points, with such powers as may be necessary 
to extend the investigation to a full inquiry into a disposition 
of special tax bonds, and other matters suggested in the testi- 
mony submitted. 

The Commission have directed their attention to the several 
matters indicated in the various divisions of the subject made 
in the report, and in the order in which they are given, begin- 
ning with the Cape Fear Navigation Company. 

CAPE FEAR NAVIGATION COMPANY. 

By a resolution, ratified on the 2d day of April, 1ST1, re- 
ferring to a previous resolution ratified on the 2d day of 
March, 1871, the Commission was further directed to inquire 
how the information ordered by the General Assembly, at its 
session of lSGG-'OT, to be filed against the Cape Fear Naviga- 
tion Company, for the purpose of having its charter declared 
forfeited, came to be dismissed, and whether that informotion 
ought not to be reinstated upon the docket of Cumberland 
Superior Court, and prosecuted to a termination ; whether the 
sale of the State's interest in said corporation was made with 
the outside understanding that the river was to be made a free 
river, and whether unfair practices were or were not resorted 
to, to induce and complete that sale. 



4 Doci mkvi No. 1 1. [Session 

tering upon the immediate points oi inquiry thus 
ord< tement of the facts seems appropriate. 

Xh( I Fear Navigation Company was an old corporation 

chartered originally in 17W. The charter was several times 

amended, the State in the year L813 becoming a stockholder 

rnerofsix hundred and titty shares of the capital 

k of the pat valm -•-'.•" 

Complaints having been made that tin- corporation had vio- 
iharter, and thereby forfeited it. tin- subject was re- 
ferred to the Attorni oeral, who made a report to the Leg- 
islature at th< >n of 186 '67. This report we have he< 
unable t<< find, or any of the papers, or documents connected 
rewith. We are informed, however, that tlic report was fa- 
ible to tin- company and against the forfeiture. In the 
•itli <>i March, l s »'>7. a resolution was adopted by the J.eg- 
iture, directing the'Solicitor of the 5th circuit to file an infor- 
mation in the Superior Court of Cumberland County against 
] corporation for the purpose of having its charter 
1 forfeited by reason of the alleged breaches thereof. 
Tins information was accordingly tiled, and the pleadings 

having been completed, it was brought to trial in .-aid court at 

Spring Term oi 1868. In consequence of the failure of 

jury i b in tluii verdict, no decision was had, and the 

sontinued. It i-- proper to state here, that several 

persons Ik ing the owners of boats plying on the river, and 

.'nst whom large tolls were claimed by the company, united 

with the Solicitor, in the prosecution <.f the information, and 

employed counsel for that purpose 

In this state of the above action the Legislature, by act rati- 
fied on the ••tli day of April, L869, directed the Board of 

tion to sell the infc Pest of the State in the .-aid ciipora- 

at sin-h juice a- they might think advantageous to the 
nil fund. Tin 1 :• ird of Education under the authority of 
art sold the State'.- interest in the said corporation on the 

day < , for five dollar.- per .-hare, making 

$3,250 for the whole. Thoi S. Lutterloh was the purchaser 



1871-72. Document No. 11. 5 

for John D. Williams and others, who were owners of boats 
on the river, or belonged to companies owning boats. 

At the next succeeding term of Cumberland Superior Court 
after the sale was made, the information against the company 
was dismissed with the consent of the solicitor and the counsel 
who appeared with him in the prosecution thereof. 

"With this explanatory statement of facts, we reach the first 
inquiry directed in the resolution, which is : " How the 
information came to be dismissed, and whether the informa- 
tion ought not to be reinstated upon the docket and prosecuted 
to a termination ?" 

The above statement shows in brief the history of the pros- 
ecution of the information, and how it came to be dismissed. 

The reason assigned for dismissing it is this : The passage 
of the act authorizing the sale of the State's stock in the 
company was such a recognition of the continued existence 
of the charter as amounted to a waiving of former causes of 
forfeiture. 

In our opinion, this was a question of law for the decision 
of the courts, and if the conclusion to which the solicitor and 
those who appeared with him came, was correct, then a further 
prosecution of the suit was unnecessary. Having considered 
of this question, our conclusion is, that the passage of the act, 
and the sale of the State stock in pursuance thereof, was a 
waiver by the State, which alone had a right to insist upon a 
forfeiture — of all previous causes of forfeiture and a recognition 
of the legal existence of the company up to that time. 

Having arrived at this conclusion, we think it follows, 
necessarily, that the suit was properly put off the docket and 
that it would not be right to reinstate it now and prosecute it 
to a conclusion. 

It appears to us that it would be an act of bad faith in the 
State to sell her interest in the company, amounting to over 
one-third of the capital stock thereof, and at the same time 
insist upon a forfeiture that had before been committed, and 



D< : No. 11. [Session 

i\ iVk which was sold and paid for after 

knows, 
T. ■ nd inquiry, "Whether said Bale was made with 
outside understanding that the river i be made a free 

do not dearly understand what is meant by " outside 

understanding,' 1 but we suppose it means whether there was 

promise that if the State sold its interest in the company, 

it would !"• pun by those interested in that section of 

untry ami in the navigation of the river, and that by 
the right of the company to charge toll should 
ibandoni d or relinquished. 

i'a this subject we have examined all the witnesses from 

whom we had any reason to think any information could be 

obtained. < >ur conclusion is, that while this was talked of, 

• vidence to show that it was used to a certain 

with some members of the Legislature, to affect their 

lion in reference to tin- act ordering the- sale, and was also 

1 to one or moic of the Board of Education while the 

sub Bale was under consideration, yet there is not suf- 

"1 any understanding or promise of the kind 

ind make it the basis of legislative or judicial action. 

third inquiry i.-, " Whether unfair practices were resorted 

• » induce and complete the sale :" 

(>n this point we have examined a large number of witnesses 

i large amount of testimony. On full considera- 

•. our conclusion is, that unfair practices of 

kind W< »rted to, to induce and complete the sale, 

'remittances deposed I 'he Wit 

ir opinion, inconsistent with the fair dealing which 

: tin- kind. 

A brief n i is all that we deem proper, 

the end ol the war was in somewhat cripp 

.roin which it draws ' nic 

is ts doing business upon the river 

Willi The toll is act rtain 



1871-'72.] Document No. 11. 7 

portion or per centage of the freights charged by their boats for 
carrying persons or produce. It will therefore appear at once 
that the interest of the company and of the boat owners is 
antagonistic and irreconcilable, the natural result of which 
was a decided hostility between the two, and as we think, is 
shown from the evidence, a united effort of the latter to destroy 
the former. The boat owners very frequently refused to pay 
toll for the alleged reason, that the river was not kept in order 
by the company. The company, for the want of their tolls, 
had no means of making improvements. This had gone on 
until about the year 18G7, when the company begun action 
against their line ot boats to recover the tolls alleged to be due 
which at the time amounted to a large sum, and in the 
opinion of one witness, is stated at §30,000. About the same 
time, the resolution was passed directing the solicitor to file the 
information mentioned before, and then several actions were 
pending in court at the same time. The mistrial as to the 
information having been made at spring term, 186S, of Cum- 
berland superior court, the resolution ordering the sale was 
adopted at the next session of the legislature. When that body 
met in November, 18GS, the superintendent of public instruc- 
tion made his annual report in which he refers to the state's 
interest in the following terms : 

a # * This stock is at present of no pecuniary benefit to 
the school fund. For twenty-nine years ending Sept. 1S63, 
the annual dividends punctually paid to the state amounted to 
one thousand three hundred dollars." * " :: " * * 

* * * " Inasmuch as the corporation is a perpetuity, and 
the Cape Fear River must become a great commercial high- 
way, far beyond what has ever yet been the case, the franchise 
to it, is undoubtedly of great value, and can be made of essen- 
tial aid to the school fund." * " :: " * 

In the Spring of the year following this report, he advises 
the sale of the same property of which he had spoken in such 
terms, for the sum of $3,250, when he was informed of the fact, 
as appears from his report, that, up to the year 1SG3 an average 



s Doctrannrr No. 11. [Session 

annual dividend of $1,300, had been paid into the treasury of 
the State. In his examination lie Btatea as follows : "I made 
inquiry from almost every source in my reach ; from gentle- 
men from Fayetteville connected with the company; from Mr. 
Tillinghast, secretary of the company, one of the Messrs. Worth 
of Wilmington, from Mr. Lntterloh, and from others whose 
namos I do not recollect ; I also derived information from the 
reports of the company. I relied more on one source than any 
other, and that was information obtained from Mr. C. IT. Wiley 
formerly superintendent of education. This conversation with 
Mr. Wiley was in September, 1868, which was some time be- 
fore the sale was made.'* Which one of the Messrs. Worth is 
intended, Ave are not informed, but from the evidence it ap- 
pears that the Messrs. Worth, of Wilmington, had some interest 
in the line of Steamers which had refused to pay tolls, and was 
in antagonism to the company, and they also became interested 
in the purchase of the stock. 

Mr. Lntterloh was, or had been, interested in the boats, and 
had the same difficulty about tolls, and had employed counsel 
to aid in the prosecution of the information, lie had also been 
active in procuring the passage of the act ordering the infor- 
mation and sale, and was a bidder for, and final purchaser of 
the stock for the boat owners. As to Mr. Wiley, the conver- 
sation with him, which the superintendent says had the most 
weight with him, was had in September, 1 B68, before the above 
mentioned report was made. It Beems, up to that time to have 
had little or no effect on the opinion "t'the officer, and to have 
[uenl period, been aroused into sudden activity and 
force. How far Mr. Wiley's opinion concurred with that of 
this superintended will appear from letters addressed to Mr. 
Tillinghast and filed with his evidence, in which he speaks of 
the value oi this .-lock and his interest in the company. Of the 
opinion of Mr. Tillinghast, and the effect it should have had 
opinion of the superintendent, the best estimate can be 
ted from his evidenc jiven before the Commission, and 
with. It is cleur from that, that he never gave 



1871-'72.] Document No. 11. 9 

the superintendent ground on which to base the opinion that 
this stock was of but little value. 

On the contrary, he was the old and steady friend of the 
company. He says, " after the attempted trial of the suit, I 
came to "Raleigh, and had a conversation with Gov. Holden, 
and Mr. Ashley, in which I gave them a full explanation of 
the state of the affairs of the company, and my opinion of its 
value, and urged them to unite with the private stockholders 
in protecting its charter, which they promised to do. The 
conversation with these gentlemen took place some time in the 
session of 1868-69." The statement showing the dividends 
on this stock, was made before this time. It is therefore evident 
Mr. Tillinghast gave the superintendent no data on which to 
base his change of opinion. What information was derived 
from the reports of the company, and when this was obtained, 
whether before the report was made in 1868 or after that 
report and before the time of the sale, we have no information, 
except the fact, that the statement showing the amount of 
dividend before referred to and other papers accompanying his 
report, and referred to in it. were received before the report 
was made. 

From the testimony of T. S. Lutterloh and J. D.Williams, 
it appears that while the price paid for the stock, was only 
$3,250, the sum of $4,100 was used in connection with the 
purchase. Of this, $500 have been paid to T. A. Byrne, former 
clerk of the Senate, for services, who appears to be con- 
nected otherwise with this subject. And, the further sum 
of $650 was promised to him, to be paid to one D. J. Pruyn, 
or some other person for putting in a bid for the stock. 

The price obtained for stock of the par value of $32,500 was 
only $3,250 ; while at the time of sale suits were pending, and 
claims existing against boat owners for toll amounting, in the 
opinion of Mr. Tillinghast, whose opportunities for knowing 
were good, to about $30,000. Of this sum, the State's interest 
was over one-third, or about $10,000. 

No good reason was shown to the commission why these 



l" Doci hint No. 11. 3 aion 

tolls could not legally have been collected. T.v tl of the 

State's stock, her interest in these tolfa e pur- 

chaser, so that, in fact, a claim of probably three ti the 

amount realized for the stock was transferred with it. 

Immediately alter the purchase, this claim was released by 
the company, and the suits dismissed. From the evidence of 
Mr. Worth, this was one of the reasons inducing the purchase, 
and it is probable, the debts thus discharged, may have more 
than reimbursed to the purchasers the amount paid by them 
for the stock, as the purchasers were among those who were 
sued by the company for unpaid tolls of large amount. 

The boat owners combined against the navigation company. 
The company is crippled by their refusal to pay tolls. They 
complain of the failure of the company to keep the river in 
order, when they, refusing to pay both, have depri it of its 
only source of revenue and means to improve the ri\ 

This alleged failure is made the basis of procuring by the 
same boat owners, who are active in the matter, the j .oof 
a resolution by the General Assembly, directing the informa- 
tion to be filed, to declare the charter forfeited, thereby farther 
embarrassing the company, and they then retained counsel and 
aid to press the information to a successful issue. ion 

having been obtained, they procure, or aid in pr< curing, an 
act authorizing a sale of the stock, and are agai J in 

urging and bringing about a sale, at which they 1 ne the 
purch; . nd holding the majority of stocl . the 

ipany, as it alleges, a very large sum 
oth i not in t > I in thi mally i ter- 

y immediately declare the ell ira agai 
in like situation to be unjust, and 
further insisted on, and order the suits I 

The evidei to the market value < ' the stock i 

ing, which probably i from the fact that 

of the compan; . 1 the ci 
surrounding it, and the prosecution of the ' .as 

apj in the evidence, there was probibly no settled market 



IS 71-' 72,] Document No. 11. 11 

value, but each sale was to some extent affected by the circum- 
stances attending it. 

Having given the result of our investigations on the points 
of inquiry directed by the resolution, we have discharged the 
duty assigned us in reference to this subject. "We, however, 
deem it but proper to add, that in our opinion the question of 
rescinding the contract for the sale of the State's stock is one 
entirely belonging to the courts. The Legislature, before taking 
action, will doubtless look carefully into the whole subject. If 
any purpose should be entertained of directing proceedings to 
be instituted in the courts to declare the contract fraudulent, 
and to have it rescinded, we respectfully recommend that the 
attention of the Legislature be directed to the effect in the 
value of this property which has been, or may be, produced by 
the opening of new lines of communication, which have already 
reached Fayetteville, passing through the sections along and 
from which freights have heretofore been derived to some 
extent. 

PENITENTIARY BONDS. 

The next subject of inquiry was the disposition of the Peni- 
tentiary bonds. Though not strictly within the letter of the 
act of the Legislature instituting this Commission, yet as it was 
evidently contemplated, and as charges of official corruption had 
been made in connection with the purchase of the Penitentiary 
site at Lockville, and the 8,000 acres of land, we thought it 
incumbent upon us to give the subject a consideration. 

The Commission was informed that there had been a partial 
investigation into this matter by a Committee of the Senate at 
a former session of the Legislature, and we supposed we might 
avail ourselves of the testimony taken before that committee. 
Put upon a thorough search through all the papers filed in the 
different offices of the Legislative department, they were 
unable to find a single paper 'connected with this subject- 



12 Document No. 11. [Session 

What has become of them the Commission could not ascertain 
after the most diligent enquiry. 

The testimony of many witnesses was taken upon this matter. 
The inducement to make the purchase ; influences brought to 
bear upon the committee to locate, &C.J the substitution ot an 
intermediate vendor between the owners and the State ; the 
contract with the original proprietors ; and especially what 
disposition was made of these bonds, were examined into. 
The fact is well known that the State paid for this purchase 
one hundred bonds of one thousand dollars each. It is estab- 
lished by the testimony, in which there is no discrepancy, that 
fifty-six ot these bonds were paid to J. W. Heck, President of 
the Deep River Manufacturing Company, and the remainder 
to one D. J. Pruyn. It appears also that these fifty-six bonds 
were sold to John G. "Williams, a banker in the city of Raleigh, 
and that they are now in his possession. What became of the 
other bonds, to whom they were sold, at what prices, and who 
are now the holders, the Commission could obtain no reliable 
information. The said D. J. Pruyn was at one time in the city 
of Raleigh during the last summer, and a subpoena was issued 
to him and returned "executed." lie did not, however, appear 
before the Commission, and escaped before a eaj>ias could be 
served upon him. It is understood that he lives somewhere in 
the State of Ohio. 

The testimony upon this subject is voluminous, and we call 
attention to that of J. M. Heck, President of the Deep River 
Manufacturing Company, a portion of C W. Swepson's, R. \\ . 
Lassiter, C. L. Harris, John Gk Williams. A. !'. Andrews. Ja?. 
II. Hani.-. K. P. Battle and A. S. Merrimon. 

The title of the said property yet remains in the State, and 
what disposition should be made of it, is a matter peculiarly 
devolving on the Legislature. 

WESTERN RAILROAD. 

To this Company were issued, as appears by the Treasurer's 



lS71-'72. Document No. 11. 13 

report and by the testimony of A. J. Jones before the Bragg 
Committee, 1320 special tax bonds. We are unable from the 
testimony taken before us to give much additional information 
in reference to the disposition of these bonds. In the report 
made by A. J. Jones to the Governor and the Superintendent 
of Public Works, and in answer to certain interrogatories pro- 
pounded to him, he declined to surrender these bonds upon the 
grounds stated in that report : substantially, that he held them 
as trustees of the road, and the pendency of the injunction in 
Cumberland Superior Court. Mr. A. J. Jones was called 
before this Commission, and was asked what disposition was 
made of these bonds. He declined to answer that question 
for the reason stated in that examination, and the Commission 
was of the opinion that he was entitled to the privilege claimed. 
The Commission endeavored in the examination of other wit- 
nesses, viz : G. W. Swepson, William Sloan, E. Y. McAden 
and Thos. W. Dewey, to ascertain what had become ot these 
bonds. 

The Commission think that they are justified in stating that 
the bonds remaining in the hands of said A. J. Jones, did not go 
to the use of the Company of which he was President. Other 
matters of enquiry were submitted to the Commission touching 
this Railroad Company ; the disposition of the first mortgage 
bonds of the Company, amounting to some $900,000. Upon 
this point we have taken the testimony of L. C. Jones, the 
President at this time, T. S. Lutterloh, R. Y. McAden, John 
M. Rose, and others. A portion of these bonds, viz : 460 have 
been returned to the Company, and the remainder, as alleged, 
are hypothecated to secure certain advances made by R. Y. 
McAden in the year 1870. 

Testimony was likewise taken in reference to a certain con- 
tract made with John A. Hunt ifc Co., for constructing certain 
portions of said Road. 

The Commission, in prosecuting this enquiry, endeavored to 
procure the testimony of John A. Hunt. He was summoned 
to appear, but did not attend, and is now absent from this State. 

/ 



14 Document No. 11. [Session 

The testimony submitted will give full information upon 
these matters. It appears th.it no certificates • k have 

been issned to the State for the appropriation of thi ods, 

.and they are informed by reliable gentlemen that the injunc- 
tion suit is still pending in Cumberland Superior Court, the 
bill having been amended so as to strike out the name of John 
M. Rose, and insert that ot T. S. Lutterloh. 

WESTERN NORTH CAROLINA RAILROAD (WESTERN DIYIBIOl 

The appropriations made to this road and the circumstances 

connected with its administration, have attracted so larg< 

share of public attention, that the commission have gone into 

this subject in detail. To present the evidence intelligibly 

it may be necessary to give a brief history. Under an act 

passed at the special session of the General Assembly, ratified 

the 14th day of August, 1S6S, the charter of the Western 

North Carolina Railroad was so amended as to make two 

divisions, one known as the Eastern, the other as the Western 

Division of said road. The Eastern, embracing that part of 

the road from Salisbury to the French Broad river, and the 

Western, that part from the French Broad river to Ducktown 

and Paint Rock on the Tennessee line. Under the provisions 

ot this act, a new organization, known as the Western Dr 

oi'thc W. and N. C.H. R., was made at Morganton in the month 

of October 18(iS. At that time George \Y. S n was 

1 one ot tin- Directors and President of that road. Bv 

a provision of law, the State undertook I thirds 

k for this road, upon certificate being ra ide the 

rd of Internal Improvement thai one-third the estimat 

11 q taken by solvent individuals. That ' sate 

was made by George W. Bwepson, President ot said road. 

n which there were issued to him the sum of four mill: 

lars in bonds of the State. Whether that certificate was 

ma ood faith, whether the solvent subscriptions were 

directed by the terms and requirements of the char- 



1871-72.] Document No. 11. 15 

ter, is a subject to which testimony was directed, and upon 
that point we refer to thetestimonyjof G. W. Swepson, It. TV. 
Pulliam, S. McD. Tate, and the treasurer of the road, Mr. G. 
M. Roberts, and J. C. Turner. It appears from the testimony 
of Swepson that in addition to an amount of about $300,000 
taken at Morganton on the organization, the additional 
amount making up the two millions was subscribed by Little- 
field, Swepson, Henry and S. McD. Tate. A number of other 
names were afterwards reported to the treasurer of the road. 
As to the solvency of these parties,, the testimony of R. W. 
Pulliam is referred to. It will further appear by reference 
to the testimony of Roberts and others, that a resolution was 
passed, requiring 5 per cent, in cash of these subscriptions to 
be paid. The commission think that there is no evidence of 
such payment, except a portion of the §300,000 taken at 
Morganton, being about $100. There is no evidence upon 
record of any other certificate being made upon which the 
remainder of the bonds were issued, namely, the sum of 
$2,640,000. It further appears by said act, that the building 
of the road should be put under contract before the State 
could be called upon for her subscription. Whether this 
requirement of the charter in this respect has been complied 
with, is another point to which the testimony was directed, 
and special reference is made to the testimony of S. McD. 
Tate, J. C. Turner, Swepson and others. 

In regard to the disposition of these bonds, the evidence of 
M. S. Littlefield before the Bragg Committee is called to the 
attention of the Legislature, as well as statements by G. TV. 
Swepson, to the Commission composed of X. TV. TVoodfin and 
others, and which is made a part of his deposition in the evi- 
dence before us. In that statement 1278 bonds are unaccounted 
for. An account professing to give a full statement of transac- 
tions in these bonds is attached to Mr. Swepson's deposition, 
and marked as an exhibit. Another exhibit is also filed ac- 
counting for an expenditure of 8211,713.31 to secure the pas- 
sage of bills through the Legislature, and charged against M. 

CD CD CD ' CD CJ 



L6 Document No. 11. [Session 

S. Littlefickl. As to investments in Florida railroad bonds, 
reference is made to an affidavit, which has been furnished the 
commission, tiled by ( ; . W. Swepson, in some of the courts of 
New York ; as also to the evidence of Messrs. Swepson, CT 
man and Pulliam. The Commission do not think it necessary 
to give an abstract ot all the evidence touching the organiza- 
tion, management &c, of this road. They have endeavored 
to obtain all the information within their reach, and during 
the progress of their investigations, two members of it went 
to the town of Asheville and examined such persoi ere 

supposed to be familiar with these transactions. It may be 
proper to remark that the name of Geo. W. Swepson has been 
so connected with all the subjects submitted to the considera- 
tion of the commission, that his examination was conducted 
with reference to other matters as well as the subject of his 
connection with the administration ot this road. He is pre- 
sented as a whole, and cannot well be separated. Attention \a 
likewise called to the testimony of Mr. Rosenthal, who occupied 
the position of his confidential clerk. The commission cannot 
but express a regret, that it was not in their power to procure 
the testimony of another individual whose name has acquired 
considerable notoriety in connection with these bond transac- 
tions, to wit : Milton S. Littletield. 

WESTERN NORTH (AKOr.IXA RAILROAD. — EASTERN DIVT8ION. 

By reference to the report of the Bragg committee, it will 
be seen that all the State bonds issued to this company, for 
which Colonel Tate was responsible, were there accounted for 
except 316, then in the Bank of the Republic. Colonel Tate's 
testimony and report to his company account for the sale and 
disposition of these bonds. He also mentions 55 bonds sold 

in account of Dr. Mott, and not alluded to by him before the 

Bragg committee. 

The 393 bonds remaining in the hands of Dr. Mott, as rc- 
ported by the Bragg committee, arc accounted for by Dr. Mott, 



1871-72.] Document No. 11. 17 

as having been sold and expended in the construction of this 
road. 

As to the contracts on this road, particularly that with Malone 
& Co.. we refer to the testimony of Tate, Eiiason, "Wilson, and 
others. 

As to the disposition of the first mortgage bonds of the 
company issued and sold, we refer to the testimony of Mott, 
Tate, and others. 

WILMINGTON, CHARLOTTE & RUTHERFORD RAILROAD. 

]>y act of the General Assembly ratified on the 20th day of 
January, 1869, the public treasurer is authorized to issue to the 
Wilmington, Charlotte ifc Rutherford Railroad, four millions of 
state's bonds, known as special tax bonds. 

In accordance with the provisions of this act, $1,000,000 of 
these bonds were issned to Col. ~R. IT. Cowan, then president 
of this road. For the sale of \he>e bonds and the disposition of 
the proceeds, full information will be found in the evidence of 
Col. Cowan before the Bragg committee and his report to Gov. 
llolden in 1ST0 In these reports there appear to be thirty 
bonds remaining in the hands of Messrs. Soutter& Co., of Ncav 
York, unaccounted for. The disposition of these bonds is now 
shown by Col. Cowan in his evidence before the commission v 
and also the farther sum of $S,2i>0 in money of the funds oi the 
company. 

In July. 1869, Dr. Wm. Sloan was elected president of tlii^ 
company, and afterwards in the month of October he received 
from the public treasurer $2,000,000 of these bonds. Of these 
$1,700,009 were hypothecated with John F. Picfifrbl), of New 
York, in January, 1870, to secure advances to be made by him 
to this company. From January, 187<>, to November of that 
year, Mr. Pickrell had advanced the sum of $394,026.52 — lees 
$3,000 repaid January 27, 1870, by check on Bank Republic. 
In November he makes a full return of his accounts with the 
company, from which it appear that he claims as due him the 

2 



18 Dooukbrt No. 11. [Session 

sum of $44,850.65, and allows the company credit for tbe 

$1,700,000, amounting to $159,250 net, [and for the sale of 

00 of first mortgage bonds of the company which had 

been also hypothecated to secure the same loan.-, amounting to 
$272,000 and claims as due him of $44,850.66. 

The price for which these special tax bonds is reported as 
sold at Is seventeen cents in the dollar, less seven and one-half 
off, and the price of the first mortgage bonds is forty-six and 
three-fourths on the dollar. 

The Legislature cannot fail to be struck with the fact that a 
loan of $391,026.62 running through a period of about ten 
months, is made to grow by commissions, interest, Arc, in that 
short time up to the sum of $4S1,100.G5. These sums arc 
exclusive of tbe sum of $52,442 alleged by Mr. Pickcrell to 
have been advanced on the purchase of coupons, which is also 
made to grow in the same way. and. as we understand, the 
accounts is still claimed by him. 

There was also left by Dr. Sloan with Mr. Pickrell the 
balance of these bonds, amounting to $300,000. These, so far 
a- appears in the evidence, are still unsold, and unaccounted 
tor. 

"We refer to the statement of Dr. Sloan made to the Bj 
committee and Gov. Iloldcn in connection with his evidence 
before the committee. 

We '-all attention to the evidence in reference to what i.« 
known as " Anticipation Bonds," and the contract for work on 
this road. 

We issued ;i Bummons U>\- Mr. Pickrell while he was in this 
appear before the commission, which was returned 
cecuted." Bui Mr. Pickrell failed to attend, for whal 
reason the Commission docs not know. 

We refer also to the evidence of Gen. <;. !.. 1 i to the 

payment by him of $2,500 to John T. I)< • . and to Gi 
Lailin to procure the passage of the ordinance authorizing the 
issue of State bonds to this road. 



l871-'72.] Document No. 11. 18 

ATLANTIC, TENNESSEE AND OHIO KAILKOAD. 

It appears from tire testimony taken before the Bragg com- 
mittee that all the honds issued to this road were returned to 
the treasury department, except 163. Since that time sixteen 
other bonds have been returned, being those delivered into the 
department by Col. Johnson. There yet remain in the hands 
of purchasers, or parties claiming them, one hundred and forty- 
seven of these bonds. The Commission, with a view of ascer- 
taining the facts more definitelv, have examined several other 
witnesses in reference to the disposition of these bonds, and 
with a farther view of ascertaining all the facts connected with 
the institution, compromise, &c., of a suit known as R. C. 
Kehoe vs. David A. Jenkins and others. They examined 
Col. E. G. Haywood, E. C. Badger, R. C, Kehoe. R. Y. 
McAden, and re-examined T. F. Lee and Judge S. ~W. "Watts. 
For the reasons stated by him in his testimony, Col. 
Haywood declined to answer some of the questions propounded. 
Attention is called to his testimony, Mr. Badger's, R. C. Ke- 
hoe's. Air. McAden's, Judge Watts' and T. E. Lee's. 

UNIVERSITY RAIL KOAD SUIT. 

In the course of the examination of G. W. Swepson and 
Robert II. Cowan, President of the "W. C. & R. R. R. Com- 
pany, the attention of the commission was called to the fact, 
that large sums of money and bonds had been expended in this 
suit. Rumors were likewise in circulation tending to reflect 
seriously upon the Judges of the Supreme Court, in reference 
to the decision in this case. In a matter of such grave im- 
portance, the commission thought it due to the gentlemen 
occupying such high positions in the State, to call their atten- 
tion to these facts, and give them an opportunity of vindica . 
ting themselves. 

A letter was addressed to the Chief Justice and each one ol 
the Associate Justices, bringing to their notice the facts in 



20 \)<>< imi.ni No. II. S( -sion 

anection with this subject, and asking their attendance be- 
fore the commission. Each one of them came promptly before 
ive a full statement in] ice to the history, argu- 

ment i •] of that case. Their statcmei ts e I'ded 

and will be seen to contain a fnll and explicit denial "I every 

irge or in inuation having a I y to refleel up m their 

chai ity. Tlie inent « .' " 

Fowle and Badger, wl counsel in th . in 

the case, are also fil 

<H\TI!\M BAIL ROAD, AND VVILLIAM6TON AND TARBORO 5 BALL 

ROAD BONDS. 

In regard to the disposition of the bonds I the 

Chatham Railroad Company, the commission have elicited 
farther information than was given before th< .. mamis- 

aion. A certain number oi these bonds haven< tbe< nreturned 
to the Treasury departnn nl a atafc tin the examination of Wt 
J. Hawkins, before tlie commission above alluded to. These 
are generally designated as unconstitutional bonds, and the 
amount and number are given in the report oi tlie Treasurer 
of the State. 

Since the examination of J. R. Stubbs before the Bragg 
committee, and his report to the Governor and Superinten- 
dent <>t Public Works. One hundred and fifty other l»>uds 
have been issued to that road under an ordinance 1 the con- 
vention. The mortgage required by the termsoi the ordinance 
has been made, and is filed with the Treasurer. A detailed 
statement of the U6e and disp< se bondi .. given in 

a communication addressed to the chairman of the commission, 
by K. P. Batt [., and appended thereto ia the award of a 

referee to settle a question of difficulty between this company 
and <»ne John F. Pickrcll, <>i New York. 

BALB "• fORTfl < BAIL BOA O BONDS. 

Ju reference t" th. ighty nd 



1871-72.] Document No. 11. 21 

dollars of the bonds known as the North Carolina Railroad 
bonds sold by the Public Treasurer, we have examined Mr. 
Swepson, D. A. Jenkins, S. McD. Tate, TV. J. Hawkins and 
TV. II. Jones. Attention is called to the evidence of these 
witnesses for the circumstances attending this sale. 

GENERAL OFFTCAL VENALITY ANT) CORRUPTION'. 

The commission have taken evidence as to every charge of 
official venality and corruption of which they had received any 
information, or of which they had heard any rumor of a char- 
acter worthy of consideration, and refer to the evidence of the 
witnesses on this subject without reference to each particular 
witness, the evidence being so intermixed with that on other sub- 
jects, as to prevent any satisfactory separation. TVe refer to the 
evidence of J. G. Hester, as to the purchase of carpets by II. J. 
Menninger, [Secretary of State, and to that of Mr. Menningerin 
relation thereto. TVe also refer to the evidence of D. A. Jen- 
kins, Public Treasurer, as to the receipt of a sum by him from 
G. TV. Swepson, or Swepson and Tate, and to the evidence of 
qo\. Tate on the same subject. 

"We also reter to the evidence of L. G. Estes, as to the pay- 
ment of $2,500, to Deweese and Laflin, to procure the passage 
of the ordinance by the Convention of 1808, authorizing the 
issue of bonds to the TV. C. & R. R. R. Co., which sum was 
afterwards repaid him by Mr. Porter, of the firm of Souttertt 
Co., New York, as he states : TVe refer also to the transfer of 
twenty shares of stock to G. TV. TVelker, directed by M. S. 
Littlefield, and paid for by him, as appears by the evidence of 
R. TV. Pulliam and the statement of Mr. TVelker in relation 
thereto. 

In a statement following the evidence of G. TV. Swepson is 
charged the sum of $211,713.39 as paid to several persons by 
dircction of M. S. Littlefield. So far as we were able, we have 
caused these parties to be summoned before us, and have ex- 
amined them with reference to these payments. All have 



22 Documkbi N<>. 11. asion 

responded except James Sinclair and Judge Tourgee, who did 
Qot appear. Judge Tourgee addressed a note to the commis- 
sion in reference to the Biima alleged to have been paid him. 
We call attention to the evidence of G. W. Swepson, Rosen- 
thal and the particfi named in the Bobject. We also call atten- 
tion to the evidence of Gen. G. W. Lewis in reference to the 
charge of $4,500 :k paid G. I*. Peck, about which G. P. Peck 
was also examined. We also call attention to the evidence of 
Swepson and Gen. Lewie as to the payment by Gen. Lewis ot 
$10,000 to Gen. Littlclield for his aid in procuring the passage 
of the hill through the legislature authorizing the is.-ue ot $300,- 
000 of bonds to the Williamston and Tarboro' Railroad. 

In connection with this general subject, we also call atten- 
tion to the statement submitted by G. W. Swepson as part of 
his evidence in which he attempts to account fur the 1,278 
bonds not accounted for by him to the Woodfin committee. 
Mr. SwepsoD Bays he offered to return to this committee like 
bonds to this amount, but they preferred to receive in lieu 
thereof $150,000 in money. This statement shows the dispo- 
sition made by Swepson of these bonds except 60 of which no 
disposition is given. 

We also call attention to the fact shown in the evidi 
Dr. Sloan, of the sale by him to Pickrell of a one-half of a sul- 
phur mine in Gaston county for $21 about the time the 
bond transactions were taking place between him and Pickrell, 
and .- the testimony of ( ren. R. V. I [oke and ! >. S. ( ; ; 
ci this point. We also call attention to the fact, that the firm 
ofSoutter& Co., charge in their account with theWestern 
ill Carolina Railroad, W. D., Bixty bonds and $21,250, and 
in the;. tnt with the Wilmington, Charlotte and Ruther- 
ford Railroad Company, thirty bonde and $8,259 including 
paid to Judge Person - Col. Cowan, in New York, 

as paid and expended in connection with the action known as 

the University Railroad case. < >t this sum it appears that 7"> 
bonds and $2<>,5<><) were paid to counsel. Ib>w the additional 
sum was expended does not appear. There is evidence also 



1871-'72,] Document No. 11. 23 

going to show that A. J. Jones, president of the Western 
Eailroad Company, and Dr. Mott, president of the "Western 
North Carolina Eailroad, E. D., were understood as agreeing 
to pay a proper portion of the expenses incurred in reference to 
this action. But it does not appear that anything was paid by 
these parties or their roads. 

Since the writing of the foregoing report certain other 
evidence has been taken which is not yet completed, and 
which will be the subject of a future report if anything impor- 
tant shall be elicited. 

All of which is respectfully submitted. 

W. M. SHIPP, 

JOS. B. BATCIIELOE, 

J. G. MARTIN. 



CAPE FEAR NAVIGATION COMPANY. 

Raleigh, April 25th, 1871. 

Mr. C. L. Harris was called, sworn and testified as follows : 

Question. "Were you one of the officers of the State of 
North Carolina ? 

Answer. Yes. I am Superintendent of Public "Works. 

Q. Did you have anything to do with the sale of the State's 
interest in the Cape Fear Navigation Company to T. S. Lut- 
terloh ? 

A. I think I did have. I can't say positively whether I was 
present at the meeting when the stock was sold or not. 

Q. "Was there any declaration in regard to the sale of that 
stock, that the stock was to be sunk and the river made a free 
river ? 

A. It was represented that the stock was worth nothing, and 
that if sold the river would be free. 



L'4 Uocmnon No. 11. B< -sion 

Q. Wa- the conversation with Mr. Lutterloh, or with oth«r 
parties ? 

A. I cannot remember whether with Mr. Ashley or others. 

Q Were you having frequent conversations with Mr. Ashley 
or Mr. Lntterloh in regard to this sal<- '.' 

A. I think I did at some time before the Bale. 

Q. What was date of sale '. 

A. The Let day of May. 1869. 

Q. What is your best recollection as to whom these conver- 
sations were had with '.' 

A. 1 can't remember being present at the time "l' Bale. I 
had conversations with regard to the sale which was math- under 
the act of the Legislature. The Company was represented as a 
auisance, the 6tock as worthless, ami the river stopped up by 
trees. I had no conversation.-- with any one hut T. S. Lnt- 
terloh and S. S. Ashley. The stock was sold at £5 j>er share. 
and was bought by T. S. Lutterloh. It was stated that the 
corporation was entitled to certain tolls, and by making this 
purchase, the river would be made 1:< 

Q. Was Mr. Ashley interested in negotiating this Bale i 

A. Mr. Ashley, so tar as I know, was not interested in the 
sale, nor was he acting o tar as T know, as the agent of Mr. 
Lutterloh. 

Cross Examined. I had one or more conversations with Mr. 
Lutterloh and Mr. Ashley. My recollection is not ?ery clear. 
1 can give no information aboul tlie terms of sale except what 
I derived from those conversations. 

Q. Were those conversations had with you a> a member of 
the board to influent <■ your action '. 

A. Yes, I suppose so. All the conversations I had was be- 
lle. I suppose the convt rsationswere had to influence 
me as a member of the Board. 

Q. Were a member of the board, influenced in your 

action by these conversations. 

A. Yes, I v...-. as I had no information except what J de- 
rived tin-- .ugh them, hut the matter was not pressed upon me. 



1871-'72.] Document No. 11. 25 

Mr. Lutterloh came to me and volunteered the information, 
but I do not remember under what circumstances, Mr. Ashley 
communicated with me. 

Q. Were you influenced as a member of the board by the 
prospect of the river being made a free river ? 

A. No, not specially. I was influenced by the representa- 
tion that the stock was worthless, and the corporation a nui- 
sance; trees in the river &c, and that it was thought best to 
get rid of the company, and get what we could for it. I had 
no impression of the value of this stock before these conversa- 
tions. 

Q. Did you understand, that if Mr. Lutterloh bought this 
stock the river was to bo a free river ? 

A. Yes, I so understood him to say, if it was purchased the 
river was to be free. 

C. L. HARRIS. 

Sworn to and subscribed before the Commission. 

Capt. T. F. Peck, being sworn testified as follows: 
Q. Did you have a conversation with any one in regard to 
the sale of the States interest in the Cape Fear Navigation ? 

A. I did have a conversation with Capt. A. P. Hart, Captain 
of the Steamer Gov. Worth, on board his boat at Wilmington, 
about the time the negotiation for the sale of the stock was 
taking place. He was then a stockholder of the Cape Fear 
Steamboat Company. He said that his company desired to 
purchase the States interest in the Cape Fear Navigation com- 
pany, for the purpose of keeping any other party from pur- 
chasing it, and interfering with them, and that Mr. T. S. Lut- 
terloh had had a communication with Mr. Ashley, and had 
paid Mr. Ashley $250, to keep them posted as to the bids for 
the stock, and to prevent it from falling into other hands, to be 
used to their injury. I had formerly been a captain on one of 
the boats and I and Captain Hart were old friends. We met 
and were discussing matters generally,, and the subject of the 
Bale of this stock was introduced, but I dont know how, or by 



36 ])<xrMK.vr No. 11. [Session 

whom. I dont know that Mr. Lutterloh was interested ill the 
Cape Fear Steamboat Company af that time. I think he was 
interested at that time, in what was known as the Express 
Line, which line is still running. One of the boats of that line 
was built and owned entirely by Mr. Lutterloh. I do not pre- 
tend to ^ive the precise words of the conversation, but merely 
the substance of it. 

T. F. PECK. 
Sworn in and subscribed before the Commission. 

llKNLi M< Donald being sworn, testified : 

Q. Did you have any conversation with any one in regard 

to the sale of the of the State's interest in the stock of the 
Cape Fear Navigation Company? 

A. Ye.-, 1 had a conversation with ('apt. .1. A. Worth, who 
was agent of the Cape Fear Steamboat Company, in the year 
I^ii v , i;i relation to the rates of freights on the Cape Fear 
river, lie said they would be lowered if we could get control 
of the Cape Fear Navigation Company, and if they ^ot control 
of it they would sink the stock and make the river free. 

Q. Do you know who the stockholders in the company arc '. 

A. 1 do not. Alter I heard of the sale of the State's stock 
the freights were raised on some articles considerably. They 
have been reduced since the 1st day oi January last. The 
i flour under the old rates were twenty cents per 
barrel. After the sale, the freights were put up to 40 cents 
per barrel. The freight on bacon before the sale was $1.50 

I; after sale it was $2. Molasses was increai 
but I do not know how much. 

Q. Do know of any line running boats irregularly, 

taking fr< '_ than printed rate 

A. ^ < - : 1 have paid freights by contract with such boats 

at less than the printed rates- flour sometimes at 17 cents. 

.Mr. Y. S. Lutterloh was not in anyway connected with the 

steamboat company. 

II. M. M. DANIEL. 

Sworn to and subscribed before the Commission. 



1871-72. Document No. 11. 27 

Raleigh, April 26th, 1871. 

Mr. W. G. Hall being sworn, testified: 

That his father's estate was a stockholder in the Cape Fear 
Navigation Company ; that eighty-two of the shares of the 
stock of the estate was sold by the executor to T. S. Lutterloh 
for ten dollars per share. The sale was immediately alter the 
purchase of the interest ol the State by the same party. Mr. 
Lutterloh came to me for the purpose of making the purchase. 
He said they were to have a meeting of the stockholders of 
the company. He wished to get a majority of the stock 
present in the meeting; that if he did not purchase the stock 
he could purchase that of Mr. Hooper ; that they were going 
to sink the stock, and it would be of no value. I was one of 
the executors of my father, and was a director in the Cape 
Fear Navigation Company. I do not recollect that at any time 
he said they were going to make.it a free river. I sold ten shares 
of the stock at auction for nine or ten do^ars. My impression is 
that I sold this stock in the latter part of the year, 1SGS, or 
Jan-nary, 1SG9. The market value of this stock was about ten 
dollars. When they were trying to get the meeting which 
I spoke of before, I remained out one day to prevent a cporum 
being held, and Mr. Tillinghast did the same. We kept this 
up several days, I don't know how long, and during the time 
Mr. Tillinghast was summoned to Raleigh, where he remained 
several days. 

My reason tor staying out of the meeting was, that I under- 
stood they intended to break up the company and ruin the 
value of the stock. There were combinations formed for the 
purpose of depressing the value of the stock which I think had 
influence in keeping it down. I think Mr. Lutterloh was en- 
gaged in these. There was also a suit against the company for 
the purpose of taking away its charter. I think these combi- 
tions and the suit depressed the price of the stock in the market 
below its real value. 



28 Document lso. 11. [Session 

Q. Who was the party prosecuting the suit for the purpose 
of taking away the charter of the company ? 

A. The Cape Fear Steamboat Company, Orrel line, known 
as the the Halcyon line and Lntterloh's line. Mr. Orrel said 

that he had employed Mr. Fuller to prosecute the suit ; that 
Mr. Luttcrloh and Mr. Worth were united with him in the em- 
ployment of Mr. Fuller, and that he had been called upon for 
his portion of fees for counsel, but don't remember amount 
to be paid. 

Q. Who owned and controlled operations of the Cape Fear 
Navigation Company at the time of the meeting in June, 1869 I 

A. J. D. William's, ]). J. Worth, T. J. Jones, and R. B. 
Lutterloh, estate of Geo. McNeil, and W. M. Tillinghast, either 
as individual owner or estate of Sam'l. Tillinghast. R. B. Lut- 
terloh was son of T. S. Lutterloh. I represented the stock 1 
had sold to T. S Lutterloh, not having been able to transfer it 
for want of a secretary. T. J. Jones had been a partner of one 
of the Messrs. Worth, but I don't remember which. Mr. J. 
A. Worth had an office over the store of Worth and Jones, and 
was agent of the Cape Fear Steamboat Company. B. Gr. & lb 
G. Worth were owners of that company. 

Cross Examined. I know of no sales except those made at 
auction prior to the sale by myself as executor of my father and 
administrator of my brother, which sale was made about the 
10th of June, 1 869. After the war I do not know of any funds 
in the hands of the company. The river at low Mater was in a 
very bad condition, as I understand. 

There i.- a new line called the People'.- Steamboat Line ii. 
which Mr. T. II. McKoy, Mr. Kerchner and "Mr. Blocumb, 
are interested, and Mr. Slocumb Mas one of those who 
carried round a memorial to legislature to bo signed bv citizen.- 
to procure thi.> investigation. 

Rbdibbot. Capt R. M. Orrel told me that he had come with 
T. S. Lutterloh to Raleigh to buy the state's stock ; that the 
.-aid Lutterloh Mas t<> let the Cape Fear Steamboat Company. 



1871-72. Document No. 11. 29 

and Orrell's line have a part of the said stock, and that they 
would then have matters in their own hands. 

W. G. II ALL. 

Sworn and subscribed before the commission. 

Col. E. D. Hall was examined and testified, and says he was a 
senator in the legislature from the county of New Hanover at 
the session of 1S66-'G7, and was chairman of the joint com- 
mittee appointed to investigate the affairs of the Cape Fear 
Navigation Company, and was the anther of the resolution 
raising the joint committee. Persons who were prosecuting 
this investigation of this matter before the legislature, were 
representatives of the various steamboat companies en the Cape 
Fear river. Among whom were T. S. Lutterloh, Capt. A. P. 
Hurt and a number of others representing companies. I can- 
not be very accurate in giving names, but the steamboat com- 
panies were generally represented. 

A great deal of testimony was taken by the committee in the 
form of depositions, which were filed and cannot now be fouud 
among other papers after diligent search for them. I was 
employed two or three days in the search for them. The labors 
of the committee resulted in a resolution requiring the solicitor 
of the 7th district to file an information in the superior court of 
Cumberland county. 

There had been complaints tor a number of years against this 
company for their exactions in tolls, &c, on the part of steam- 
boat companies and efforts to break up the company, and these 
complaints were excited long before the oiganization of the 
People's Steamboat line. 

Mr. T. S. Lutterloh was a member of the legislature but was 
;it the same time before the committee. 

K.J). HALL. 

Sworn to and subscribed before the commission. 

Mb. A. II. Slocumb, was sworn and testified : 

1 am a resident of Fayetteville, and am a merchant and dis- 



30 Document No. 1 1. 

tiller. I have four distilleries, and four Stores, and am also a 
member of the People's line of Btea oboats, and own three 
thousand dollars of stock in it. My annual freights for trans- 
portation of produce on the river amonnt to between six and 
eight thousand dollar?, but nearer the latter sum. My interesl 
lb for cheap freights, more than for profit in the line of steamers. 
I had a conversation with Mr. Luttcrloh in May, 1869. Mr. 1.. 
then showed me a receipt for the State's stock in the Cape Fear 
Navigation company signed "W, W. Ilolden." and said that 
that gave them the control of the river: that they did nut 
intend to use it, but that the boats on the river must conform 
to certain rules with regard to freights. Ifc did not then say 
he was interested in the purchase. I then spoke of the suit. 
and Mr. Luttcrloh said this purchase dismissed all that. I 
afterwards had a conversation with J. T). Williams, in regard 
to the purchase of the State stock. Captain Green was present 
at the conversation. Mr. Williams said that the purchaser of 
the State stock gave them the control of the river and all the 
boats running on it, and they must comply with certain rates 
of freight, and that freights had trot to be higher. Witness 
said that he would send his produce by flats. Captain Gr< 
said, if he did he would have to pay toll, or the beats would be 
seized. Williams and Murchison was the own< rof the expi 
line of boats. The Halcyon was owned by Mr. ( >rrell, andthc 
Marion by C. P. Mallett. 

The Cape Fear Steamboat Company owned at that time, the 
i ivernor Worth and A. P. Hurt, I thinkthe Juniper was also 
running, but irregularly. She was owned partly by the C 
Fear Steamboat Company, and partly by Mr. Bnllard. I think 
at the rates of tolls charged in October, 1870, by the Naviga- 
tion Company the aggregate amount of tolls which the com- 
pany would receive for one year, would be between $25,000 
I $30,000. I have my opinion based on these facts : The 
North State, one of the boats does about one sixth of the busi- 
ness on the river, in my opinion. There are six boats on the 
river. 



1871-'72.] Document No. 6. 31 

The agents make returns of the profits to the Navigation Co.. 
I think according to the amount of freight carried by the North 
State, the aggregate tolls would be as above stated. My opinion 
according to this statement is, that the stock of the eompany'is 
worth $200,000. I understand by the charter, they are allowed 
to declare a dividend of 15 per cent, upon the par value of the 
stock. The average rates of toll were 20 per cent, on the 
whole amount of freight. This rate was fixed in Oct., 1870. 
These rates have been reduced since the appointment of the 
investigating committee 50 per cent. 

These rates of toll are to be charged on all products of the 
field and the forest, and upon all general articles of merchan- 
dize. At the time that the notice was served by the Cape 
Fear Navigation Company on the People's Line, in the year 
1870, Mr. T. A. Byrne was in Fayetteville. I told him that 
the Navigation Company had served a notice upon us, requiring 
us to pay toll. Said he, " They can't do it, tor I engineered 
that whole business for them. I had charge of it, it was put 
in my hands. I got the Board of Education together and got 
them to make the sale. They stated (referring to Mr. Lut- 
terloh and Capt. Orrel,) that their object in buying this stock 
was to sink it, and make the river free, and to get rid of a 
troublesome and expensive lawsuit/" At the close of his 
remarks he repeated the assurance not to give myself any 
uneasiness, but to come to him. 

In a conversation with T. S. Lutterloh, about a month ago, 
I went up to Mr. Lutterloh and said, " Mr. Lutterloh, you 
bought that stock from Mr. Byrne, and not from the State." 
Said he, " No, I didn't. Byrne acted simply as my agent or 
commission merchant, as I may say." I replied, "You paid 
him $500." Said he, ''Somewhere near that sum." Mr. Lut- 
terloh, in reply to a question, said he had not paid anything 1" 
Mr. Ashley. 

Ckoss-Examined. I became acquainted with the Cape Fear 
river about March, 1860, at which time it was in good navi- 
gable condition. I was down the river in that \ear in low 



:;•_' Document No. 11. [Session 

water, though nut in extremely low water, and met with no 
obstructions. Last summer money was expended to improve 

the river, but I do not know how much. They were engaged 
about two months with ten or fifteen hands, and I do not think 
they improved the navigation. I do not know of any divi- 
dends made on stock, and think there have been none. My 

estimate as to value of the stock was based upon the rates of 
tolls before reduction. My opinion is that the attempt at im- 
provement have resulted in no good. Freights and tolls have 
both bei d reduced. Within the past thirty days I had a con- 
versation with Mr. Lutterloh in reference to the suit which had 
been pending against the Cape Fear Nayigation Company. 
Tie proposed to me, as representing the People's Steamboat 
Company, to buy an into rest in the Cape Fear Navigation Com- 
pany. I replied that 1 had rather see it broken up, as it was 
always a nuisance, lie said it was impossible to break the 
charter : that he had the suit brought to depress the stock so 
that he might buy it up cheap ; that he had run tor the Legis- 
lature, in order that he might introduce the bill to have that 
suit brought. About the same time Mr. Lutterloh said that 
he might procure quite a large number of the shares at ten 
dollars per share. This conversation occurred while I was 
acting in the interest oi the People's Line, which was willing 
to pay one-third of the money that had been paid for the con- 
trolling interest in the Navigation Company, that then the 
stock should be sunk and the river made free. 

II. W. BLOCUMB. 
Sworn to and subscril.ed before the Commission. 



I,' mi i on. April -1. 1871. 

Capt. A. J\ III i: [ w.-.s ealled, and testified as follows: 
I am weil acquainted with the Cape Fear river between 
Wilmington and Fayetteville, and have been running on it as 



1871-72. Document No. 11. 33 

captain of a steamboat for eighteen or nineteen years. The 
following minutes of my depositions is substantially correct: 

" That the river is subject to numerous obstructions caused 
by trees falling in, which usually lodge where they fall, or float 
to the shoals and lodge there. If these trees are suffered to 
remain they produce where they lodge a great accumulation o* 
sand, which, of course, makes shallowness of water. It is, 
therefore, absolutely necessary that such trees should be imme- 
diately removed, and these trees which fall during every season 
are so numerous that he would not undertake to state their 
number. They could of course be removed, and the means 
required for their removal would be two flats, with apparatus 
for raising logs and about fifteen men. By the use of these 
means, with two general trips through the line during the 
year, and at low water, together with the jetties where the 
shoals form to concentrate and deepen the channel, and the 
cutting away of projecting trees, the navigation could be kept 
free and open. The Cape Fear Navigation Company have not 
such means and appliances needful to keep the navigation free,, 
nor have they any hands employed in removing obstructions, 
nor have they had either men or flats employed for 18 or 20 
months. Indeed, the company is not now giving any attention 
to the removing obstacles from the river, nor have they given 
any for the time above stated. The condition of the naviga- 
tion is very bad, indeed, and dangerous to the boats, because 
such obstructions as described are allowed to remain, and by 
the statement that the navigation is bad and dangerous he 
means both in good and low water. This is caused by neglect 
to keep the river perfectly cleaned out, and the remedy is to put 
on the proper force and use the necessary appliances. Several 
flats and the steamer North Carolina and .Rowan were injured 
by snags in the, channel of the river. In the last seven years, and 
when the water was sufficiently high to permit of the running 
of the boats, if the obstructions had been removed, he would 
not have had to stop his boat and with his own crew remove 
obstructions from the river. And this has happened as many 
o 



34 Document Ko. 11. [Session 

as six times, and during the same time he has frequently had 
to stop tor days at the jettees three miles below Fayetteville 
with boat and Hats detained there for the want of small labor 
on the jettees. Within this whole time there has not been a suf- 
ficient force put on the river early enough in the season to 
efiect much good. The main work on the river ought to be 
done at low water, and until the water is low, no work is re- 
quired, but falling trees ought to be removed. At any stage of 
the water, and when the water is from three to five feet deep, 
land slides can be removed. He has an indistinct recollection 
that one Jack Evans attempted to work on the river during 
the summer and fall of 1SG2, but the work was inefficiently 
done, and the cause of the small amount of work was not be- 
cause of the shortness of the season, but by reason of the fact 
that he began too late with inefficient appliances. In the most 
cases the work has been in the charge of unskillful men, and 
lie does not think the man Evans spoken of was ever a pilot on 
the river, lie docs not recollect that the jettees were worked 
on in 1S62, and if Nathan Magnire worked on the river in 
1863, yet he was not a pilot, and he has not seen an efficient 
force on the river for the last several years. During the time 
CaptainDriver worked on the rivei although he was an efficient 
man, still the inadequate force and appliances, and the short- 
ness of the time he was at work prevented him from doing 
much on the river. Captain Orrcll and Mr. Lutterloh, all had 
contracted to do work on the river, but the worl not 

efficiently done. The government had control of the steam- 
boats from the 12th of March 1865, to the L2th oi August L865. 
The running time down the river i> L2 hours to L3 hours, and 
up 16 to 1^ hours- 1 1" the river was put in go< d order, cleared 
of logs and tree.-, and if the jetties were constructed OH the 

shoals, it might be kept in like order tor..: 'per year, for 

all expenses. It would cosl from $4,000 to $6,000 to put it in 
good order. The two flats which the company had in the river 
were sunk long before the government took possession and 
control of the navigation oi the liver. Work could have been 



1871-72,] Document No. 11. 35 

clone in the river when he was delayed there. The company 
is not building any boats and has no appliances tor removing 
obstructions in the river. The company has no capital or 
effects out of which to build boats so far as he knows." This 
otate of things continued from the time ot the institution of the 
suit against the Cape Fear Navigation Company, in the Cum- 
berland Superior Court until after the sale of the stock of the 
State in said company. After the purchase of the State stock, 
during the year 1870 appliances for clearing out the river were 
put on by the navigation company. The facts hereinbefore 
stated, were deposed to by me in the suit prosecuted in Cum- 
berland Superior court, and existing at the time of the institu- 
tion of that suit. 

The most difficult points are Spring Hill, Timm's Shoal, 
Morehead's Shoal, and Brown's Reach. Spring Hill, 3 miles 
below Fayetteville is perhaps the most difficult. Timm's and 
Morehead Shoals both bad, and difficult to say which is the worst. 
I have done no work on the river myself, but superintended 
getting up machinery for flats and other apparatus for clean- 
ing out the river. I passed down river in low water. Timm's 
Shoals had not been worked on except cutting out trees. The 
work on the river began at Fayetteville and continued down, 
cutting away projecting trees and getting out logs. I do not 
know what force was employed, but suppose from 15 to 20 men. 
I did not superintend plan of operations. 

Cross examined. Much rain fell during that time (1869.) 
River was high and little work could be done. I had been 
spoken to to get ready to go to work during that season. From 
the time work commenced it lias been as vigorously prosecuted, 
as circumstances would permit. I do not concur with Mr. 
SlocunnVs views. I think the river has been improved. I 
have passed down the river since the works were commenced, 
and think the river much improved. Works were going on in 
1870 up to the time that operations were closed by cold water. 
The company has its apparatus to go on with. I don't know 
how much has been expended, but the cost has been con- 



3G Document No. 11. [Session 

siderable. It was designed to make permanent improvements 
and arrangements have been made for the construction of jetties 
at the shoalest places. 

Redirect. The North State is an average boat, with a busi- 
ness equal in amount to that of the others. Thei 
running on the river. The expenditures on the river by the 
new company including cost of apparatus isbetwi 3,000 or 

$4,000. The tolls charged by the old organization are about 
10 per cent. I have never heard of 20 per cent, being charged. 
My returns are made through reliable men, I never did it in 
person, but by agents. I sold out my interest in the Cape 
Fear Steamboat Company last June or July. 

I do not know that any return Las ever been made by the 
Cape Fear Steamboat Company to the Cape Tear Navigation 
Company uuder its new control. I was owner of steamboat 
stock at the time of the purchase of the state's interest. Mr. 
Lutterloh came to Raleigh as general agent of the steamboat 
interest, representing the Cape Fear Steamboat Company, 
Orel's line and Malett's, and bought the state's stuck as such 
agent or manager for the several corporations. Boats were run 
from August, 1805, to the time ot sale, without paying toll 
because no work had been done. Tolls were claimed to be 
due against the different companies to the amount of $25,000. 

I spoke to Capt. Peck of a rumor tnal Mr. Lutterloh had 
paid to Mr. Ashley sl'."><> to keep him informed, as steamboat 
companies were anxious to buy, and wished t" bo kept posted 
in bids. I do not know how bids were put in. Stock was 
advertised to be sold under sealed pro] Mr. Lutterloh 

never told me he had paid Mr. Ashley money. The only 
chargi .- in.;''.'' were tor payment of stuck at $5.00 per share. I 
don't k > any thin., pt from rumor oi m paid for 

outside influence. NTo dividends have been declared by Oape 
Fear Steamboat Company that I know of. The : I sup- 

pose, is that a suit for damages fur $5,01 Ut against 

it for lire caused by sparks and burning a barn. I may have 
heard that a dividend was nol declared becaus p 'Jit had been 



1871-'72.] Document No. 11. 37 

applied to pay for the purchase of the state's interest in the 
Navigation Company. The purchase was by Steamboat Com- 
panies and not by individuals. I have sold my own interest in 
tie Navigation Company to the Messrs. Worth in a lumping 
trade at sixty or sixty-five dollars. The steamboat company's 
nominal par value was sixty dollars per share. At the time of 
sale the market value was five dollars per share. I sold in 
Julv last. 

A. P. HURT. 

Mr. T. S. Li;tterloii testified : 

Q. Were you a steamboat owner at the time of the purchase 
of the State's stock in May, I860, or had you any interest in 
steamboats running on the Cape Fear River ? 

A. In April, 1869, I made a conditional trade with J. D. 
Williams, by which I sold to him the steamer R. E. Lee. I 
was allowed six months to decide whether I would retain one- 
half interest in the boat or not. At the end of six months I 
declined to retain one-half of the interest. I had no other in- 
terest at that time in the steamboat lines on the river. 

Q. Did you purchase the stock of the State in the Cape Fear 
Navigation Company ? 

A. I did. 

Q. Did you have any agents employed in that purchase ? 

A. I did, an agent or attorney. 

Q. Was T. A. Byrne one of those agents ? 

A. He was the only one. 

Q. Was he Clerk of the Senate at that time ? 

A. He was the Clerk of the previous session, but the Senate 
was not in session at that time. 

Q. When did you employ him as your agent ? 

A. At the last advertising of the stock. I think it was twice 
advertised in May, 1869. 

Q. Did you make more than one visit to Raleigh on that 
business ? 

A. I did. 



38 Document No. 11. [Session 

Q. Did you see Byrne on both occasions ? 

A. I do not recollect that I did on the first. 

( v >. Did you have any conversation with Byrne about the 

passage of the hill for the sale of the State stock in this Com- 
pany ? 

A. I may have done so. I don't recollect. 

Q. When did this conversation take place, and what was the 
nature of it i 

A. I don't recollect of having any particular conversation 
with him in reference to it. 

Q. How long before the sale of the stock, before you cm- 
ployed Byrne as your agent I 

A. About three hours. I met Mr. Byrne on the street. 
He said that some of the Board necessary to the opening of 
the bids, were absent, and the Board could not be got together ; 
that he could get them together; that Mr. Coleman, who was- 
one of the Board, was sick, or something was the matter, and 
would have to be brought there in a carriage. 

Q. How much did you pay Byrne? 

A. Five hundred dollars. 

Q. Did Byrne tell you he had the management of this stock 
for the State ? 

A. ITe did not that I recollect of. 

Q. Was the Attorney General, Coleman, present at the sale 
or opening of the scaled bids for the stock ? 

A. 1 can't say. I don't know. I was not present. I know 
that Mr. Ashley wa8 there, as I paw him at the door of the 
( iovernor's office. 

Q. Did you see the Attorney General brought up, and it' :-". 
ior what purpose was he brought up '. 

A. My impression is that I saw him, but am not certain. I 
think he was brought up to superintend the opening of the 
Bide. 

(,>. What was his condition \ Was he drunk or sober? 

A. I would say he was about half drunk. 



1871-72.] Document No. 11. 39 

Q. Have you not told that he was so drunk he had to be 
lifted out of his carriage ? 

A. I do not recollect telling it. 

Q. How long before you saw him brought up that it was 
told the bid was awarded to you ? 

A. About one or two hours. 

Q. Who brought you the information that yours was the 
successful bid ? 

A. Mr. Ashley. 

Q. What service did Mr. Byrne render you for the $500? 

A. He acted as my attorney and broker. 

Q. What work did he do as your attorney and broker ? 

A. I don't know, except getting the majority of the board 
together. I had sent in a sealed bid for the stock thirty days 
before. Mr. Ashley told me the old bid would do if I did not 
wish to change it. 

Q. Did your attorney and broker act in good faith toward 
you? 

A. As far as I know. 

Q. Did he not put in a bid ot ten dollars more on the 
stock than the whole of your bid ? 

A. I was so informed, but did not consider it a bid. Do 
not know who were the other bidders, except that I know that 
J. D. Williams put in a bid at the first letting. 

Q. How many hours did Mr. Byrne act as your agent or 
attorney ? 

A. That day until I got through with the arrangement for 
the purchase. He went with me to the governor when I got 
the transfer of stock and paid the money. 

Q. What were the terms of the contract you made with 
Byrne when you employed him ? 

A. Byrne proposed to me to get the board together. He 
remarked, I couldn't get them together. He said that Cole- 
man was indisposed, and would not be out unless sent for. He 
gave no reason for special influence he could use. He seemed 
to think without him I would have to go home and come back. 



40 Document No. 11. [Session 

1 don't know who were present at the opening of the Lids, 
except (Jow llolden, Messrs. Ashley and Coleman. 

Q. Did you pay any other money in consideration of that 
purchase, except that $500 '. 

A. Xo, to no one; none to Mr. Ashley. 

Q. Hid yon know that Mr. Byrne ever divided the money 
with any one '. 

A. I do not know ; 1 have no reason to know. 

Q. How much money did J. D. Williams give you to pay 
for the State stock '. 

A. lie gave mo a letter of credit authorizing me to draw 
on the house of Williams & Murchison, Wilmington, for four 
thousand dollars or the like sum. 

Q. How much did you pay for the Stock \ 

A. $3,250. 

Q. How much did you pay t<> other persons tor and on 
account ot the purchase of the Stale stock : 

A. Nothing. I concluded to put in a second hid, and not 
let the old one stand, and gave a boy that I found at the door, 
live dollars to take my bid in. I could not get in myself. 

Q. What did you do with the remainder of the $,4000 after 
paying the State, and Byrne, and the messenger i 

A. I checked it out ot the bank here, and carried it to Fay- 
otteville, and deposited in bank to my own credit. 

Q. Do you know that Mr. Williams has had to pay $400 
more on account of this purchase besides the check he gave 

A. lie paid in that neighborhood, about that amount. 

Q. What did you do with that 4<ni j 

A. I was security to T. M. Lee, at Clinton, for about that 
amount, and paid the money by check to the sheriff ot Cumber- 
Land on that account. 

Q. What did you tell Mr. Williams, when you went back, 
in accounting lb'- this money V 

A. I don't recollect exactly what I did tell him. Mr. Byrne 
told me some one was going to make a bid to run us unless 



1871-72.] Document No. 11. 41 

we paid him something; that some parties were going to bid, 
not that they wanted the stock, but only to run us. 

Q. Did you not tell Mr. J. D. Williams when you went 
back to Fayetteville that a party was about to bid upon the 
stock, and that you had to use the balance of the money to pay 
him one dollar a share to prevent his bidding ? 

A. I don't recollect that I did. I told him that Byrne said 
that there was a man, I think by the name of Pruyn, who 
would put in a bid just to run us unless we paid him something. 
I asked him how much he would charge. He said one dollar 
a share. I don't think I told Mr. Williams that I had paid 
this money to secure the stock, and that it cost four hundred 
dollars more than the $1,000 he had given me. The conversa- 
tion took place with Williams after 1 returned to Fayetteville. 

Q. What did you tell Mr. Williams to induce him to pay 
$100 more after you went back to Fayetteville ? 

A. I dont recollect. It may have been that I wanted to have 
the dollar a share ready to pay if necessary. 

Q. Did you ever say that you ever paid $500 to Byrne, to 
prevent other bids being put in, and if so, to whom ? 

A. I dont recollect of saying so to any one. Byrne said this 
irresponsible party was going to put in a bid, and I told him 
to prevent it. I was told by Byrne that this party would re- 
quire one dollar a share not to bid. 

Q. What was your first bid for the State stock % 

A. I think it was $500. 

Q. Why did you put in the second bid ? 

A. I was afraid the old bid was overlooked ; it had been there 
thirty days. Both bids were accepted. The first was accep- 
ted, but they told me they had not advertised. They after- 
wards advertised, and accepted it a second time. 

Q. Were you refused admittance to make your second bid \ 

A. I was not refused because I did not try to get in. The 
door being closed I did not feel at liberty to intrude. 

Q. Were you told by the doorkeeper that you would not be 
permitted to go in \ 
A. I was not. 



4g Document No. 11. [Session 

Q. Why did you pay him $5, to carry in your bid i 

A. I preferred to do it rather than to go in, intruding 00 

their meeting after it had organized. 

Q. Whose agent were you in the purchase of this stock. 
A. My own, and that of J. D. Williams, and Daniel G. 
Worth. 

Q. Was this stock purchased fur the benefit of the steam- 
boat companies ? 

A. I so considered it. 

Q. Which steamboat companies did you purchase tor I 
A. For the Cape Fear Steamboat Company, and the Express 
Company. Orrel said he was to come in and I may have 
promised him, but dont remember, and it I had kept my stock 
in the steamboat Company, I would have considered myself an 
owner in the Navigation Company. 

Q. Did R. M. Orrel fix up this matter with Byrne before 
you came up here ? 

A. I dont think he did. 

Q. Did Orrel come with you to Raleigh before the sale of 
the stock, for the purpose of looking after il '. 

A. lie was here when the bill was before the Legislature 
authorizing the sale, but I dont think he was here afterwards. 
Q. Was not Orrel here with you in Raleigh and inducing 
the Legislature to pass the bill for the Bale oi this stock? 
A. I think he was. 

Q. Did you and Orrel operate together in that matter? 
A. We liad talks together on the subject; there were not 
many plans, lie went with me to Mr. Ashley to induce him 
to make the sale, who got, at first, very much displeased at our 
Interfering, but afterwards concluded to recommend the sale. 
Q. Did you talk to members <>t the Legislature about the 
sale ? 

A. I suppose I did, as 1 was here for that purpose. 
Q. What inducements did yen hold out to members to vote 
t p this bill, for this sale i 

A. I think 1 told them we wanted to improve the river. 



a871-'72.] Document No. 11. 43 

We had a EaiJroad which begun in the woods and ended in 
the woods, and was no use unless the river was put in order. 
I dotit remember saying we wanted to make the river a tree 
river, nor do I remember we said we wanted to sink the stock. 
I dont remember telling Mr. Ceburn Harris or any one else 
so. I dont remember having any conversation with Mr. Har- 
ris, and think he was out of town. I may have said so. I 
dont remember what I said to Mr. Ashley. I dont know how 
Mr. Ashley became pleased, but I saw him a week or two after- 
wards, and he seemed to be in a good humor, and had conclu- 
ded to recommend the sale. 

Q. Did you not tell A. H. Slocnmb in the town of Fayette- 
ville in the last two months, that you said to the members of 
the Legislature to induce them to vote for the sale of the stock 
of the Cape Fear Navigation Company, that the intention of 
those wishing to purchase, was to sink the stock, or words to 
that effect ? 

A. I don't recollect telling Mr. Slocumb, or any body else 
that. 

Q. Did you ever tell him so at that time or at any other 
time? 

A. I don't recollect ever telling him so at any time, or any 
body else. 

Q. Was that ever your intention, and did }'ou ever so ex- 
press it to any member of the Legislature at the session when 
the bill was passed for the sale of the stock ? 

A. Such was never my intention, nor was it that of those I 
represented. ISTor did I ever so express, it to any member of 
the Legislature or others, as I recollect 

Q. Did Mr. Orrel say so in your presence to members of 
that Legislature, and did you stand by and keep silence ? 

A. I dont recollect any thing that I said, or that Orrel said 
during that whole session. 

Q. Did you authorize Mr. Richardson, Senator from Moore, 
to speak to the members of the Legislature about it ? 

A. I don't recollect speaking to Mr. Richardson about it. 



44 Document No. 11. [Session 

Q. Do you state from your best recollection that you did not 
state to a member of the Legislature that session, that if the 
stock was purchased by those you represented, that the Btock 
was to be sunk. 

A. I do not remember, to my best recollection, telling any 
body that my object was to sink the stock. 

Q. Did you ever use words to that effect. 

A. I have told persons that we had put the tolls so low that 
they would not amount to much. 

Q. Did von ever tell any one that the steamboats owners them- 
selves would keep up the river, and not levy tolls upon any one '. 

A. I don't think I ever told any one that. 

Q. Did you ever tell any one that the object ot purchasing 
the stock, was to get rid of vexatious litigation '. 

A. That was the object in part, but I don't recollect telling 
any one so. 

Q. Did you not run a boat or boats, and were you not inter- 
ested in that traffic from August, 1SG5, to the time of the 
purchase ot the State stock ? 

A. Up to the time I sold to Mr. Williams in April, 1869, 
and up to the time of the sale of the State stock. 

Q. Did you pay the Cape Tear Navigation Company any 
tolls during that period ? 

A. I did not. 

Q. "Were not you and other steamboat companies indebted 
to the Cape Fear Navigation Company for tolls accrued between 
August. 1S65, and May, 1869 \ 

A. 1 ran boats and carried freights, but as they had nol 
fixed the river, I did not consider the tolls due. and, in fact, 
part of the time they did not claim anything. 

Q. Did you refuse to pay the tolls? 

A. Sometime in lsOT or 1868 they demanded the tolls. 
amounting to $2,400 or %% which I refused to pay. where 

upon they issued a writ. Suit was pending at the time of the 
purchase of the stock. 



1871-72.] Document No. 11. 45 

Q. "Was the pending of that suit one of the inducements to 
buy that stock ? 

A. That was an inducement, though I was advised by my 
attorney that they could not recover. 

Q. How did Mr. Byrne know that you wished to buy the 
State's interest in the Cape Fear Navigation Company, and 
did he not agree to aid you in the purchase ? 

A. He agreed to aid me in the purchase. How he found 
out I wished to purchase I don't know, but he first introduced 
the subject. 

Q. Was. Mr. Byrne present when the bids were opened? 

Q. I think he was outside, though he may have been in the 
room. 

Q. Did Mr. Ashley tell you whose bids were highest at the 
first bidding ? 

A. Yes, he told me my bids were accepted, but he had con- 
cluded not to sell, as first advertised, but to accept of new bids. 

Q. Did you receive any information from Mr. Ashley as to 
the price bid by other persons either at the first or second bid- 
ding, before the bids were decided on ? 

A. I did not. 

Q. Did you send up your bid by mail, or bring it up per- 
sonally. 

A. Personally. 

Q. How many trips did you make \ 

A. I only made two trips to Raleigh about the selling of the 
stock 

Q. How did you get your information about the selling of 
the stock I 

A. Through W. N. Tillinghast, who was secretary of the 
Cape Fear Navigation Company. 

Q. Had you not put in your bid before Mr. Williams gave 
vou the letter of credit? 

%j 

A. I think I had a letter of credit both times I came. I 
got the letter in Fayctteville. I came up to Raleigh and put 
in the bid. That bid remained in until the second time of 



46 Document No. 71. [Session 

opening the Lids, when he gave me another letter of credit, and 
I again came to Raleigh. My old l>i 1 waa still pending before 
the Hoard. When I got here I pnt in a new bid, 1 think lor 
the same price. 

Q. Why did you put in a new bid for the same amount 
when you were informed that the old bid was in, and had boon 
considered by the Board i 

A. Because I was afraid the old bid would be misplaced and 
be overlooked. 

Q. How long were you in Raleigh before the bids were 
opened at the second bidding \ 

A. I got here cither the evening before, or the morning oi 
the opening of the bids. 

Q. Had you seen Mr. Ashley since tli2 first bidding before 
that time ( 

A. I think jiot. 

Q. How long belore the opening of the bids was it, that Mr. 
Ashley told you your bids had been considered '. 

A. In the forenoon of the day oi the second 1 lidding. I 
was afraid still he would forget it. 

Q. Why did Mr. William.; give yon a letter of credit for 
$-1,000, when ho knew your bids were in for only $3,250 '. 

A. I don't know why, unless he supposed 1 would want 
money for some other purpose, or give a bigger price, or some- 
thing else. Al the first bidding I wis not acquainted with the 
gentlemen who had control of the stock. Mr. Andrew Jones 
was here and promi help me by getting the commit' 

together, &c, if 1 would pay him. 1 think I told Mr. Wil- 
liams T had so agreed t<> pay Joni . 

Q. What were _m.ii to pay >'■ 

A. He said three or five hundred dollar.-. 

Q. B •'! not reason t" believe that the arrangement to 

obtain the of Byrne, wa le by Mr. Orrell at the 

time when you and ho came here together, during the session 
tin' Legislature, and when yon were unexpectedly called home? 

A. I do not. I have no reason to think there was anv such. 



1801-72.] Document No. 11. 47 

Q. Did not Mr. Orrell tell you of such arrangement made 
by him, when he returned home ? 

A. He told me Byrne would help get the bill through the 
Legislature. 



Raleigh, April 28, 1871. 

Examination of T. S. Lutteeloh continued. 

Q. What became of the suit for tolls against you ? 

A. I understood it was dismissed after the stock came into 
'the hands of the new company, as was likewise the suit brought 
against Mr. Worth. 

Cross Examined. Q. At what time did you dispose of the 
E.E.Lee? 

A. Upon reflection since my testimony yesterday, I think it 
was in April, 18G8. 

Q. When you came up here for the purpose of making the 
purchase were you interested in any steamboat company ? 

A. I was not. 

Q. Will you state according to the best of your recollection 
now, what were the real inducements for you to apply to Mr. 
Byrne for aid in effecting the purchase, and all the circum- 
stances connected with it % 

A. One was, I did not think I could get the board together 
myself. The other was, that I was a conservative and he was 
of the other party. 

Q. Did you stipulate before hand for any particular sum to 
be paid, or did he say afterwards what he was to be paid. ? 

A. I rather think we did not agree until the afternoon, which 
was after the services had been performed. 

Q. Why was it that you did not report fully on you return 
to Mr. Williams in relation to the disbursement of this money ! 

A. My recollection about the report I made to Mr. Williams 
is, that I had paid Byrne and $500, that I had given him a check 
for it. I also reported that Mr. Byrne would be down from 



48 Document No. 11. [Session 

Raleigh in a day or two, and I would pay him the balance of 

the $650, which was the dollar a share on the stock, and Mr. 
Williams gave me the $400 for that purpose. 

Q. How came that dollar a share to be paid ? 

A. Mr. Byrne said there was a man here who was going t<> 
bid on the stock, lie was not a fair, honest bidder, but setting 
about to run people. 

Q. Has he ever called upon you fur that money? 

A. He has called upon me, but I have never paid it, because 
we gut into a little dispute, and I did nut pay it. lie owes me 
an individual account, and part of it was to be paid in that way. 

Q. Please explain about your two visits to Raleigh, about 
the purchase of the stock, and how far you were authorized by 
Mr. Williams to go ? 

A. On the first visit he limited me to $5. The next time 
for which (last night) he did not limit me, but allowed me to 
advance the price if it was necessary. 

Q. Do you concur in the opinion of Captain Hurt as to the 
condition of the river for several years previous to the pur- 
chase of the interest of the State ? 

A. I do. It was in very bad condition from the middle of 
the war to time of sale. 

Q. Did the company have any funds to make improvements? 

A. Mr. Tillinghast, the treasurer of the company, told me 
he had none. 

Q. Was it not that there Mas no improvement and the com- 
pany had expended nothing that you had refused to pay tolls ? 

A. The reason I did not pay tolls was that they did not 
work the river, and it was in very bid condition indeed. 

Q. State, if you know, what was the market value oi fch 
stock of the C. V. X. C<>. up to the time of sale V 

A. 'I'll.' usual price was about sa.00. I purchased some as 
lowas "ne dollar, som< at four, mid some as high as ten, for 
the pur 1 organizing the meeting. 

Q; Re-direct. Whal did you and Mr. T. J. Jones ask Mr. 
Slocumb for stock ? 



1871- Ti!. Document No. 11. 49 

A. I offered mine at ten dollars. That has been within a 
month. I get all I can at five, and sell at ten. 
Q. "What did Mr. Jones ask ? 
A. He asked $12.50. 

Q. Did you, as agent for the new company, demand tolls ? 

A. I never demanded tolls as the agent of the new com- 
pany. I notified Mr. Starr that we would charge tolls, but in 
a joking way, as I had no authority to charge tolls. 

Q. Were tolls demanded by the new company, and when ? 

A. I think about 12 months or more ago they were de- 
manded. My impression is, that it was about January, 1870, 
but they were not enforced. 

Q. Captain Hurt said that the work on the river commenced 
by new company in June. 1870. Did the new company de- 
mand tolls before the work commenced ? 

A. I think they did. They wanted money to build flats to 
begin work. 

Q. How did you refresh your memory last night ? Was it 
from books, papers, memoranda, or conversations with parties? 

A. It was partly from conversations, partly from paper.--. 

Q. What party refreshed your memory ? 

A. I was talking with Mr. Williams about the time, I sold 
the boat and he convinced me it was in 1868 and not 1S69. 

Q. What papers did you examine ? 

A. Some memoranda I had in my pocket. 

Q. Did you tell Byrne when you came to trade for this 
stock that you was a good Republican ? 

A. I did not. 

Q. Was it the rale of the sale that no Conservative could 
buy this stock ( 

A. No such rule. 

Q. Then why do yo.i say, that you being a Conservative you 
could not purchase '. 

A. It was a supposition of mine that if a Republican made 
the same bid I did, he would get the sto?k. 

Q. Di 1 } on approach Mr. Foster, a member of the House of 
1 



50 Docimknt N". II. [Session 

Representatives from Bladen county, and tsk liis assistance 
about tlic passage of the act ior the sale o\ the State's stock. 
If so, did he reply, " Is there any mone> in it?*' 

A. That is about his reply, and I said, " None from me." I 
did ask liim for his aid. lie then went up immediately to 
see Mr. Ashley, and afterwards voted for the bill tor the sale 
of stock. I don't know his first name. 

Cross Examined. Q. Did you p«\ Mr. Foster anything 'f 

A. JSothing. 

Q. Did you pay Mr. Ashley any tiling '. J 

A. .Nothing. 

Q. Did Mr. Williams, or Mr. Worth. ••>• others, ever give 
you any instructions to manipulate the legislature or others to 
procure the purchase of this stock : 

A. They never did. 

Q. What instructions were given to rou by Mr. Williams 
in relation to this matter? 

A. He instructed me to come to Raleigh and buy the stock 
in a fair, business-like way, I suppos 

By Commission : How much stock did you own in the 
Cape Fear Navigation Company before the purchase of the 
State stock ? 

A. I am not certain as to amount. I think about 40 shares. 

Q. How much did you retain of the stock purchased of the 
State for yourself \ 

A. Not a single share. 

Q. A,t what time was it determined dy the steamboat com- 
panies that they would purchase th rotate stock '. And was 
it not divided out among the si< araboat companies according- 
to their interest in the several lines .' 

A. 1 think the purchase was detemviu d on about the time 
the Legislature passed the ad authorizing (lie sale. I do not 
know how Mr. "Williams divided it out. I transferred the 
whole to him. 

Q. lias tin- stock at any tim.J >\n.<- ::,.• -ale of the State's 
stock risen in market value I 



lS71-'72.] Document No. 11. 51 

A. A gentleman wanted about 200 shares and I went 
round and picked it np at 7 dollars. I do not know that 
there is much change in the market value. 

Q. Were not the owners of the several boat lines active in 
procuring the passage of the act selling the State's interest, 
and interested in the sale ? And also active in procuring the 
passage of the resolution directing the solicitor to institute 
proceedings for a forfeiture of the ci arter? 

A. Mr Orrel and myself may have been considered aa 
taking an active part, but no one else. Mr. Mallet had a boat 
and Mr. Worth also. 

Q. Who employed the counsel to aid the State in the pros- 
ecution of the suit against the company in 1866? 

A. Mr. J. A. Worth, Mr. Orrel and myself. 

T. S. LUTTERLOH. 

Sworn to and subscribed before the Commissioners. 

.Dr. C. T. Murphy was sworn : 

Q. Were you a member of the Senate which passed the bill 
for the sale ot the State stock in the Cape Fear Navigation 
Company? If so, state all you know of the history of its pas- 
sage. 

A. A few clays after taking my seat in the Senate 3 the bill 
authorizing the Board of Education to sell the stock of the 
State in the Cape Fear Navigation Company came up on its 
third reading in that branch of the assembly. I remember 
distinctly there was a discussion upon the merits of the bill. 
I think I voted in the negative when the roll was called. Im- 
mediately after voting, and before the vote was announced, I 
stepped into the lobby to speak to a friend, when Mr. Rich- 
ardson, Senator from Moore, asked me with some emphasis and 
force, why I voted against that bill ; that my friends about 
Fayetteville, and those interested, would be " down upon 
me ;" that they greatly desired the passage of the bill. I can- 
not say positively whether from Mr. Richardson or some one 
else, but certainly the impression was made upon my mind by 



52 Document No. 11. [Session 

those favoring its passage, that if the bill passed, it would insure 
the clearing out of logs and obstructions and secure the free 
navigation of the river. To the interrogatory of Mr. Richard 
son I replied that none of my Fayette vi lie friends or constitu- 
ents had spoken or written to me concerning the matter, and I 
was inclined to vote against authorizing the Board of Education 
to sell anything just then. By reference to the Senate Journal 
I find my name recorded in the affirmative on the final pas- 
sage ol the bill, which, it the record be true, I changed my 
vote on the representations made to me by Mr. Richardson 
who himself and several other Senators around him, appeared 
perfectly to understand the lull import of the bill, and who 
appeared particularly solicitous about its passage. 

Cross-Examined. Were you a member of the Senate until 
the bill alluded to come up on its third reading ? 

A. I was not. 

Q. Is it not your impression that you voted against the bill 
on its final reading, notwithstanding the journal shows to the 
contrary ? 

A. That is my impression rather, though I may have changed 
my vote under the reasons stated in the answer set forth in 
my first reply. 

Q. Did any ot the boat owners represent to you that if you 
voted for this bill, the navigation of the river Bhonld he free '. 

A. They did not. 

< >. Did vou understand by free navigation, the river Mas to 
)>r improved and made free for the passage of boats ( 

A. The impression was, that if they could purchase the Slate 
stock the navigation was to be free. 

(). What was meant that if the State stock was sold it 
would make free navigation i 

A. 'flic ini] ression was that the State stock was a clog and 
restriction, and it it was got out of the way the river could be 
improved. 

Q. Was it your understanding that ih's purchase was to be 
made by the owners ol the stock in the navigation company j 



1871-'72/| Document No. 11. 53 

A. That was nry understanding, that the navigation company 
was to buy it. My understanding as to the difference between 
the navigation company and the different steamboat companies 
was not yery distinct. 
RE-DraECT : 

Q. Did you hear the matter much talked of directly after 
the passage of the bill, by the members ot the Legislature. 

A. After the passage of the bill, I made inquiries myself, 
and the result was that it would secure the advantage before 
spoken of. I can't speak ot general impressions ; it appeared 
to be the general understanding of those who favored the bill. 

Q. "Was it understood at the time, that certain persons stood 
ready on the passage of the bill with this view, to buy the 
stock ? 

A. It was understood by me that the stock of the State was 
to be bought by the private stockholders in the same company. 
I did not have at that time very clear views of the distinction 
between the navigation and the steamboat companies. It was 
thought the interest of all who navigated the rivers to put the 
stock down, and have the river free. 

Q. If you voted for this bill, did you not do it because you 
thought the ownership of that stock by the State was an im- 
pediment to the improvement of the river and a clog upon the 
navigation company ? 

A. If I voted for the bill it was upon the representations 
made, that it was a clog upon the navigation of the river. 
He-direct : 

Q. "Who made the representations ? 

A. I cannot remmember distinctly ; the matter was discussed 
on several different occasions. Mr. Richardson, of Moore, more 
than others. I don't think I discussed the matter with others 
than members of the Legislature. 

C. T. MURPHY. 

Sworn to and subscribed before the Commission. 

Mr. John D. Williams having been sworn, testified. 



54: Document No. 11. [Session 

That he thinks it would cost about three thousand dollars to 
put the river in ordinary boating order, and that an expendi- 
ture of about two thousand five hundred dollars a year would 
keep it in about the same condition. I think the freightson the 
river average annually about one hundred and fifty thousand dol- 
lars and the ordinary rate of toll charged by the Navigation Com- 
pany has been from 10 to 12-J- per cent of the freights. The rate- 
was increased after the purchase of the State's stock something 
above the old average, probably to about 1.") per cent., with a 
view to improvements contemplated at that time by owners "t 
the stock. They had been within that year reduced to about 
10 per cent. 

The stock has been of uncertain value in the market, but I 
think $5 has been a fair market value. Since the purchase oi 
the State's stock, there has been rather a better feeling towards 
it. During the pendency of the litigation, there might have 
been some depression. 1 bought none at that time. The 
Navigation Company brought suit against persons who were 
iudebted to it for tolls for transportation on the river. These 
parties, I supposed, were then instrumental in procuring the 
passage of the resolution, through the Legislature, directing the 
information to be filed against the Company to have its charter 
forfeited, thinking that if the charter was forfeited and the cor- 
poration dissolved, they would be discharged from the payment 
of the tolls they owed. These parties were the owners of the 
Cape Fear Steamboat Company — Orrell's line and Lutterloh'fi 
line. Neither 1 nor Mr. Worth, so far as I know, nor the boat 
lines in which we were interested, had anything to do in pro- 
curing the passage of the bill for the sale of the stock through 
the Legislature. On reflection, I did hear that Mr. J. A. 
Worth, the agent at Fayetteville, of the Cape Fear Steamboat 
line, was in Raleigh at the time of the passage of the act, but 
I don't know that he took any part. I BUppose he was in 
Raleigh on that business. -Mr. Worth and I had no communi- 
cation on the subject of the purchase of the stock until after 
we heard it was to be sold. Before the first sale, I told Mr. 



1871-72,] Ppoi lOGzrr No. 11. 55 

Lutterloh I would take a pari or all of the stock at $5 per 
share, but made no preparation at that time to pay for it. He 
came to Raleigh to put in a bid for the stock, and on his return 
told me that his bid of $o was the highest bid made, but that 
they declined selling, and would advertise the sale. After the 
sale was advertised. I think land Mr. Worth came together. 
I concluded it was best for us to buy, situated as we were, Ave 
being the owners of three-fourths in number and four-fifths in 
value of the boats on the river at that time. I don't think I 
would have bid at all, it I had not been interested as a boat 
owner on the river. I don't think I communicated at that 
time with any one but Mr. Worth. If Mr. Orrell had wished 
to coire in, I think I \\ ould have let him in. He was the only 
one mentioned, and I knew he was in no condition to purchase 
at that time. After the second sale was advertised, and I had 
had the understanding with Mr. Worth to buy the stock, I 
authorized Mr. Lutterloh to come to Raleigh and put in a bid 
for us, (Worth & Williams.) and gave him a letter of credit 
for $4,000, to pay for the stock if it was bought. I did not 
restrict him in the amount to bid, but was willing to give the 
$4,000, perhaps more, in order to secure the purchase. We were 
excited in the matter, and can't say how high Ave would have 
gone. We thought it would be of great service to us to control 
the operations of the Navigation Company, situated as Ave 
were. There was po understanding, express or implied, that 
any part ol the $4,000 or any other sum Avas to be used by Lut- 
terloh in procuring outside influences to enable him to make 
the purchase ; but I did intend to pay him a reasonable com- 
pensation for his services as our agent. The stock was divided 
equally between Mr. Worth's firm and mine, that is, the mer- 
cantile firms of Williams & Murchison, and Worth tfc Worth. 
The one-halt was transferred to David G. Worth, but the 
object was the same a« it' to Worth S: Worth. Exclusive of 
purchase money, our entire expenditure has been about $4,000 
(including the cost of apparatus) since the purchase of the stock. 
The Navigation Company put out a notice that they would exact 



56 Doitment No. 11. [Session 

toU&j lint none were exacted until November, iSTO, and irom 
that time to tliis period I think the gross tolls have been 
about $6,000. Mr. Lutterloh, upon his return to Fayetteville, 
showed me Gov. llolden's receipt for $3,250 paid ior the stock, 
and an obligation to transfer the stock to him, aud also said 
that he had paid Mr. Byrne £500 for his (B.'s) services ior 
aiding in getting the Commissioners together, and that Byrne 
had informed him (Lutterloh) that there was another party 
who would put in a higher bid than his. unless he was bought 
off. To do this, to buy oil' this party, he paid him one dollar 
a share, amounting to $G50 ; and he paid five dollars additional 
to a servant to carry in the last bid. ami then claimed S400 
additional to the $4r,000 to cover the whole expenses in relation 
to the purchase which I paid him. The Company had deter- 
mined to make fuller and permanent improvement to the river 
by putting in jettees and otherwise. These improvements 
were delayed from several causes until these disturbances with 
regard to the purchases arose, and they were not then disposed 
to make larger investment-. The estimated costs of these im- 
provements was about $12,000, which I think would have put 
the river in good boating order for the year. After that an 
annual expenditure of from $2,500 to $3,000, would have been 
sufficient, exclcsive of salaries, to keep the channel free from 
obstructions. I don't think 1<> per cent, on the freights ad 
exorbitant toll. The tolls were not collected with a view of 
making dividends, bat tor the improvement of the river. Mr. 
Williams is President of the Navigation Company. 

By Mb. McKay. Did you ever say on the streets of Fayette- 
ville. that you had paid Hold en, Byrne, Ashley and among 
them $1,150, to get tlii.- thing through, and it they go back on 
us v. e will show them up. or words to like effl 

. i do not remember what 1 may have said about the 
$1,150, but] never charged specifically, any individual with 
any particular oi the money, except the £500, 

paid to Byrne. 

Q. Did you make n words in the former question, 



1S71-72.] Document No. 11. 57 

since the purchase of the stock of the State, to Robert M. 
Orrel, or words to like effect in the town of Fayetteville ? 

A. I never did, in substance. 

Q. Give us your best impression of what words you did use, 
on these occasions? 

A. I can't pretend to say, I can't recollect. 

Q. Did you speak of the transaction as a corrupt one ? 

A. I don't know what I may have said about it, but I did 
not think it a fair way of dealing, but did not think it vitiated 
the sale. 

Q. Had yon ever had any conference with Robt. M. Orrel. 
prior to the purchase of the stock of the State. 

A. I have no recollection of any particular conference, 
though he talked to me about it. 

Q. Do you know that Tim Byrne had the sale of this stock 
under his control ? 

A. I do not. 

Q. Do you know that the said Byrne wrote to T£. M. Orrel 
offering to sell this stock to him \ 

A. I never heard of it before. 

Q. Was Byrne a resident of your town '. 

A. He lived there at one time. 

Q. "Was his residence in the county of Cumberland at that 
time? 

A. I do not know. 

Q. Did you institute proceedings in 1852, against the Cape 
Fear Navigation Company. 

A. I filed an information then. 

Q. Were you a boat owner at that time \ 

A. Yes, I^owned a good deal of interest then. 

Q. Did you file that information as a boat owner, or because 
you believed the charter had been forfeited ? 

A. I think I was led into it because I thought the charter 
had been forfeited, and because I was a boat owner and wanted 
to try the question. Since 1S52, there has been a disagreement 
between the boat owners and the Navigation Company. 



58 Document No. 11. [Session 

Q. What is the bulk of freight on the river composed of? 

A. Naval stores is the largest item. 

(>. On the organization of the new company or since that 
time, did a resolution pa.-s ordering the dismissal of suits 
brought for tolls by the old company 1 

A. Yes, a resolution passed instructing the Attorney "1' the 
company to dismiss such suits. 

O. Have you overheard the Messrs. Worth & Worth, say 
what amount of tolls they owed the company '. 

A. I never have. 

Q. How yon as President of the company sold lots belong- 
ing to it at Haywood \ 

A. I have not sold them. They are worth from 15 to 20 
dollars a lot, and there are 8 or 10 of them. I am examining 
into them, as I had not been able to identify them. 

Q. Did Worth & Worth pay you back half the $1,150 you 
expended in the purchase of the stock. 

A. They did. 

Q. Did you tell them why you asked from them $535, more 
than the stock cost \ 

A. They understood it perfectly. 

Q. How did you appoint Mr. Lutterloh, as your agent .' 

A. ITe seemed to be the proper man. He was acquainted 
with the facts of the stock being on the market, ami 1 wanted 
to buy. 

Sworn to and subscribed before the Commission. 

J. D. WILHAM& 

Statement of B. C "Worth : 

I have been a stockholder in the Cape Fear Steamboat com- 
pany continuously from the year 1853 to the present time, and 
have been agent of said company at Wilmington for the same 
period, except the interval from Augu.-t. l v ''>.">, to October, 
186ft, and during that time was kept clo>ely advised of the 
atfairs of the company. The Cape Fear Steamboat Company 
paid tolls icgularly to the Cupe Fear Na\igation Com] >any from 



1871-72.] Document No. 11. 59 

1S53 to the close of the war, in the Spring ot 1S65, conforma- 
ble to the rates established by that Company. At one time 
twelve and a halt per cent, on the gross amount of freight 
carried, and at a later period ten per cent. We very frequent- 
ly complained of the Navigation Company, and charged that 
they were inefficient and did not expend in improving the 
navigation of the river as much as they were required to do by 
the terms of their charter, and we in common with other boat 
owners on the river, regarded tlie tolls as onerous on this ac- 
count. We were willing- to pay the tolls if the money, or a 
just proportion ot it thus raised, was applied to the purposes 
contemplated by their charter. At the close of the war, in 
March, 1S65, the Cape Fear Steamboat Company was left with 
one boat, the steamer A. P. Hurt. She was taken possession 
of by the United States government, and used by them until 
some time in the following August. During the last year or 
two of the war, the Cape Fear Navigation Company did but 
little to improve the river, and it was, and is, notorious that the 
results of the Avar left this company without means or appli- 
ances to prosecute the improvement of the river, and much of 
the stock was owned, it was alleged, by parties who were not 
able to contribute means for the pi-osecution of the work. The 
Cape Fear Steamboat Company, believing the}' could not 
properly be required to pay tolls where no equivalent was ren 
dered, or, until the Navigation Company had performed their 
duty as required by their charter, such as removing fallen trees 
and logs from the channel of the river, &c, refused to render 
lists and pay tolls, and as it was absolutely necessary that the 
work should be done to the river, the Cape Fear Steamboat 
Company at their own expense did employ hands, and with 
such appliances as they could command, remove the most dan- 
gerous obstacles to navigation, during the years 1SGG-G7, at the 
cost to said Company, of probably seven to nine hundred dol- 
lars, when the Cape Fear Navigation Company instituted 
such suit against the Cape Fear Steamboat Company, for the 
recovery of these tolls ; they having for the past eighteen 



CO Document No. 11. [Session 

months done nothing to improve the navigation of the river. 
The several boat Companies on the river made common cause 
against the Cape Fear Navigation Company and procured the 
action referred to before, during the investigation, calling on 
the said Navigation Company to show cause why they should 
not forfeit their charter. During the pendency of this 
suit, after a trial had been reached in which the jury 
could not agree, the Legislature of North Carolina passed 
an act authorizing the sale of the State's stock, in the Cape 
Fear Navigation Company. So far as I know, and believe, 
none ot the agents or stockholders ot the Cape Fear Steam- 
boat Company, had any hand in procuring said act. Nor 
did they ever think of buying said stock, until the act ot 
the Legislature authorizing the sale appeared. "Worth ami 
Worth acting lor themselves, and i: the interest of the Cape 
Fear Steamboat Company were advised, by their Attorney, 
that the non-forfeiture of the charter ot the Cape Fear 
Navigation Company, being thus recognized by the Legisla- 
ture, and as our Company was sued for tolls accumulated since 
August, 18G5, we could best protect our interest, and that of 
the Cape Fear Steamboat Company, for which we were acting. 
by the purchase of this, or any other stock, of the Cape Feai 
Navigation Company, and we acted on that advice. As we 
could not attend in person, we agreed with John D. Williams, 
who was also interested in a line ot boats, but who washable 
with us for back tolls, that he should negotiate a purchase 
of stock, so as to secure a majority of the stock, and give us 
control of the improvement of the river, so that the tolls 
collected could be applied to the improvement ofthe navigation 
of the river. Work was done, and money expended, as has 
before been shown, and no demand was made tor the payment 
ot any tolls at "Wilmington till about Lsl <i October, 1^7<>. 
said work on the river having been done in the summer of 
1^7". I was appointed to collect tolls for the present Naviga- 
tion Company at Wilmington, and served notice on the several 
steamboat companies now on the river. Regular monthly re- 



1871- 72.] Document No. 11. 61 

turns have been made by all the companies, (to-wit : Express 
Steamboat Company, Cape Fear Steamboat Company, and 
the People's Line, as also for a line, the steamer Halcyon, 
not now on the Cape Fear). All the said boats and 
companies have either paid or secured the tolls, except 
the People's Line. Their President, F. "W. Kerchner, re- 
fuses to pay the tolls, and has given bond and security for the 
same as provided in the charter. The tolls from October 14th, 
1870 to April 1st, 1871, reported to me, and secured by the 
People's Line, as above, amount to about $1,500 for down tolls. 
I have no memoranda before me, but I think this is very near 
the amount. The rate of tolls was admitted to be excessive, 
and as soon as the money expended was supposed to be re- 
turned to the Navigation Company, the tolls were reduced al- 
most one-half. I never thought of buying the stock to make the 
river a free river. Nor did I ever hear of such argument or 
inducement being held out to the State, or those having the 
management of the sale of her stock, till since the announce- 
ment by the " People's Line, that they would pay no tolls to 
any Navigation Company on the Cape Fear River. It was in- 
timated to me, by F. "W. Kerchner, that his company would be 
willing to become a partner with the Cape Fear Steamboat 
Company and the Express Company, if we would sell at cost 
an equal interest with ourselves. This was about the 15th of 
January, 1871. I replied, that I did not think our Company 
would do so, but, I thought he could buy an equal amount of 
stock at $10 per share. " Buy it, and draw on us at sight, with 
stock attached." He subsequently told me, this offer was made 
on his own account, and not for the Company. I understood 
it, when first proposed, to be an offer to buy on account of his 
Company. 

The present investigation was procured, ;:s is well know]], 
by the owners of the People's Line. 

The Cape Fear Steamboat Company, or its agents, were in- 
strumental, with the other Eoat Companies, in procuring the 
action in Cumberland Superior Court, to inquire into whether 



(>'l Document No. 11. [Session 

the Cape Fear Navigation Company had not forfeited their char- 
ter. Also, in procuring the passage of the resolution by the 
Legislature of 1SC6-CT. instructing the Solicitor to file an in- 
formation against the Cape Fear Navigation Company, and 

also employed counsel to appear before the Legislative Com- 
mittee and the Superior Court of Cumberland county. 

(Signed,) B. Ot. WORTH. 



Raleigh, Thursday. May 4, 1S71. 

Mr. S. S. Ashley, called and sworn. 

Q. Did you ever receive any money or other thing of value 
from mi}' one in connection with the sale of the state's stock in 
the Cape Fear Navigation Company for the passage ot the act 
ot the legislature, under which said sale took place? 

A. No, sir. I never did. 

Q. Do you know of any one else having done so, or have 
you any reason to believe so ? 

A. I do not. I have no reason to believe so. 1 have heard 
nothing about this transaction until since the meeting of this 
commission. 

Q. Did you use any efforts to procure the passage ol such 
acts, or to bring about said sale '. 

A. I did not. 

Q. Did you have any understanding, tacit or otherwise, that T. 
S. Lutterloh or any one else, should be kept advised of the bids ? 

A. I did not. 

Q, Did not T. S. Lutterloh or others who favored the 6aid 
sale and the passage of such act, urge the latter upon the legis- 
lature, and the former upon the P>oard of Education, upon the 
ground that they or others intended to purchase and sink the 
said stock and make the Cape Fear a free river, or something 
of that kind '. 

A. Not to my knowledge. I did not hear the debate in the 
General Assembly, and I did not hear any such reason given. 



1871- Ti.] Document No. 11. C3 

Q. Did you not urge the passing ot the said act, and making 
of the said sale upon the grounds embraced in the last ques- 
tion % 

A. I did not. 

Q. Did you have any conversations with C. L. Harris, Su- 
perintendent of Public Works, about the said sale prior thereto, 
and if so, what were their substance ? 

A. This sale occurred two years ago, and I have no recol- 
lection of talking with him. I may have done so, he being a 
member of the board, and may have given him my reasons tor 
or against selling. 

Q. Did you not give him as a reason for selling, that the 
stock was worthless and the company a nuisance? 

A. If I conversed with him near the time of sale I may 
have given that as a reason. I was convinced the stock, after 
examination, was worthless to the Board. 

Q. Did you examine into the value of the stock about that 
time ; if so, what was the nature of the examination, and from 
what sources did you derive information ? 

A. I made inquiries from almost every source within my 
reach, from gentlemen from Fayetteville connected with the 
company, from Mr. Tillinghast, secretary of the company, one 
of the Messrs. Worths, of Wilmington, Mr. Lutterloh, and from 
others whose names I do not recollect. I also derived informa- 
tion from the reports of the company. I relied more upon one 
source than from auy otner, and that information was obtained 
from Mr. C. II. Wiley, formerly Superintendent of Education. 
This conversation with Mr. Wiley was in 1SGS, which was 
some time before the sale. 

Q. Did you have this conversation with Mr. Harris for the 
purpose of influencing his action in the matter ? 

A. I did not. If we conversed about the subject > it was 
simply as a matter of information. 

Q. Did you or any one else give that information obtained 
trom Tillinghast and other sources to other members of the 
Board ? 



04 Docim'xi No. 11. [Session 

A. I did give to the Board at the time of the sale my rea- 
•ons based on this information. I probably gave them the 
lources of my information. 

Q. Where did the Board meet, and who were present 1 

A. The Board met at the Executive office. Present, Gov. 
llolden, C. L. Harris, II. Adams, Wm. M. Coleman and myself. 
As appears from the record, the date of meeting was May 1st, 
1S69. 

Q. Did you not know that C. L. Harris was not present ? 

A. The record was made at the time, and I have no otlier 
recollection than afforded by the record whether Harris wa* 
present or not. 

Q. By whom was the board got together? Was not T. A. 
Byrne active in getting them together, or taking any part i 

A. Byrne was, about, but I don't know what part he took^ 
and I don't know that he took any part. On the 31st March, 
the board advertised the sale should be made on the 1st of May 
and the board was to meet for that purpose on that day, and I 
do not know whether Governor llolden, or myself called it to- 



gether 



Q. Hid T. A. Byrne urge the sale of the stock upon you, or 
others? 

A. Not to my knowledge. 

Q. Was the matter of the passage of the act, or the tale, 
mentioned to you by one 11. M. Orrell, of Fayettevillc, or T. 
S. Lutterloh '. 

A. Not to my recollection, that either of these gentlemen 
informed me of these matters. 

<,). Do you not remember that you became angry or dis- 
pleased when this subject was mentioned to you by one of these 
gentlemen, or both, and that you afterwards got into a good 

humor and agreed to the sale '. 

A. I have no distinct recollection of that matter, though I 

thought at one time that these gentlemen were urging the mat- 
ter with unbecoming pertinacity. My impression is that in 
their convention there was something like attempted intimida- 



1801-'T2.] Document No. 11. 05 

tion, snch as threatening to break up the Company, and make 
Fayetteville a port of entry. There was also a suit pending 
against the Company in Cumberland Superior Court, and a 
suit by them for tolls due. 

Q. "What caused you afterwards to get into a good humor 
and to recommend the sale? 

A. I have no distinct recollection, except that after looking 
into the matter, I became convinced it was to the interest of 
the Board to sell. 

Q. Was Attorney General Coleman drunk, or under the in- 
fluence of liquor at that meeting ? 

A. Not according to my recollection. 

Q. Did you think the price received for the stock a tair one? 

A. I thought so under the circumstances. 

Q. Did you not know that there were large sums due from 
solvent parties to said company, of which the State's share 
was greater, possibly more than three times as great, as the 
price received for the stock ? 

A. I knew that there were dues to a large amount, and that 
suits were pending for the same, and that the collection of 
these dues was exceedingly uncertain, and that if the Board 
should proceed to collect them, the probability was the suits- 
would cost us more than we would be able to recover. 

Q. What did you understand to be the amount of the dues, 
and by whom due '. 

A. I can't tell the amount due except by reference to my 
report. I remember Mr. Worth as one of them who owed, 
and the steamboat companies generally. 
Q. Were these parties insolvent or not? 
A. I do not know. They were supposed to be solvent. 
t c >. Did you not know that the stock with proper manage- 
ment, was, and may be now, very valuable, and, that by col- 
lecting the usual tolls, it might have been made to pay the 
State S or 10, or other large per cent, by way of dividend ': 

A. I supposed that it might, but not under State manage- 
ment, that is. with the State as a stockholder. It was repre- 

5 



66 Document No. 11. [Session 

scntcd by the persons from whom J derived the information, 
hereinbefore contained, that the river was in very bad condi- 

;, full of logs, &c., and that it would require a large ex] 
ditnre of raon< . from $10,000 to 15,000, to put it in good 
condition, and the Navigation Company having no means on 
hand to justify this expense, it was thought Lest to sell the 
interest of the State. Mr. O. II. Wiley, former Superinten- 
dent, told me lie had investigated this matter thoroughly, and 
that the expense of putting the Company into working order 
as the charter required was such, lie doubted whether the 
Board would undertake it. His plan was to sell the franchise 
to some Company north, who would put the river in working 
order and make the stock valuable ; but this was before there 
was any proposition to sell. This proposition of Mr. Wiley 
was on or about the 23d day of September, 1868. 

Q. Do you know who represented the State in the meet- 
ings of the Hoard of Directors, or of the stockholders ot said 
Company since the close of the war, or before the sale of the 
stock ? 

A. The State was not represented at all to my knowledge. 
I knew nothing ot it before 1868. 

Q. At the meeting of the Board of Education, when the 
stock was sold, did any one give any reason for the sale, except 
yourself? 

A. I have no recollection of the matter except that it was 
discussed as usual. I do not think any one opposed the sale. 

Q. AVas it said or understood at the said sale that the effect 
of the sale would be to make the river free, or anything like 
that '. 

\. Not that I recollect. 

Q. Will you please Btate how the 1 lidding was conducted, 
who were the bidders, and at what sums j 

A. The bids were to he Bealed. <m the .°» 1st March Mr. Lut- 
terloh offered f<> buy and offered $5 per share, in writing. The 
Board then ordered its advertisement until May 1st, in several 
papers ot the State. Three bids were offered, one from J. D. 



1871-'72.] Document No. 11. 67 

Williams for $2.75 per share ; one from T. S. Lutterloh tor $5 
per share ; one from T. A. Byrne for live cents per share more 
than the highest bid. The Board considered that a jockey 
bid, and paid no attention to it. Williams & Lutterloh's bids 
each came through the mail from Fayetteville. Byrne handed 
his hi to the private secretary's room. 

Q. Did any one communicate to the Board that the Nav- 
igation Company owned any town lots in the town of Hay- 
wood ? 

A. They did not. 

Q. When you sold the stock was it understood the Board 
released all its interest in the tolls that were due? 

A. It was understood that the whole of the State's interest 
was transferred. 

Q. Where was the stock advertised and how long ? 

A. For 30 days, in the Raleigh /Standard and Wilmington 
Post. In no Fayetteville paper. 

Q. Did you inform or not, Lutterloh of the acceptance of 
his bid ? 

A. I probably did, as my duty as Secretary of the Board. 

Cross-Ex a mined. 

By Mr. Battle. Q. Did you, as a member of the Board, 
receive any compensation, directly or otherwise, to induce 
you to give your assent to that sale ? 

A. I did not. 

Q. Did any member of the Board, to your knowledge and 
belief, receive any compensation '. 

A. They did not. 

Q. Did you receive any compensation, directly or indi- 
rectly, to give any information of the bidding? 

A. I did not. 

Q. Was the sale i o far as you know and believe, a perfectly 
fair one ? 

A. It was. 

Q. if the Attorney General had been intoxicated on that 
occasion, don't von think vou would have noticed it? 



68 Document -No. 11. [Session 

A. T should have noticed it and refused to have acted with 
the Board. 

Q. Were you not entirely satisfied at the time, that under 
the circumstances the bid was a fair price for the stock, and 
that it was the interest of the Board to accept it? 

A. It was. 

By the Commission. Q. Did you consult the Attorney 
General or any other counsel as to the legal right ot the com- 
pany to recover the tolls which the boat owners refused to 
pay, and tor which the suits were then pending as stated 
before? 

A. I did not. 

Q. Why did you not state in your report to the Governor 
in the latter part of 18G8, the facts which you uow state as 
having been received from Mr. Wiley and others? 

A. The facts received from others were received the next 
year after the report was made. At the time of this conver- 
sation with Mr. Wiley, the question of selling was not 
agitated. I reported all tho documentary information then 
in my possession. I gave no opinion of the value of the 
stock because I did not think the information I then had was 
sufficient. 

Q. Was the fact stated by you in your said report, that the 
company for twenty-nine years, ending September, 180.°> t had 
paid annually and promptly into the treasury a dividend of 
$1,300.00, based on documentary evidenco ? If yea, can you 
furnish the committee with the documents upon which it 
was 1 >ased i 

A. It was on documentary evidence and I can furnish the 
documents. 

S. 8. ASHLEY. 

Sworn to and subscribed b sfore the commission. 



1871-72. Document No. 11. 69 

Kaleigh, May 22d, 1871. 

Mr. "William X. Tillinghast appeared, was sworn and 
testified : 

I became a director of the Cape Fear Navigation Company 
in June, 18G1, and was agent, with the duties of secretary, 
treasurer and toll collector from June, 1S62 to June, 1869. 
The paper now shown me, signed "W. N. Tillinghast, secre- 
tary and treasurer of the Cape Fear Navigation Company, 
and dated Fayetteville, N. C, July 21st, 186S, I think is a 
correct copy of a statement made by me from the books of 
the company, showing the amount of dividends paid to the 
State of North Carolina, upon stock belonging to the State in 
the Cape Fear Navigation Company, and is, I think, correct, 
so far as the books show. For several years before I became 
agent of the company, the work on the river by way of im- 
provement, removing obstructions, &c, was done by the com- 
pany by contract with individual boat owners, Mr. Orrel 
being contractor for that purpose for several years, and after- 
wards Mr. Lutterloh for about two years. Complaint was 
made by other boat owners that the work was not properly 
done. In the summer of 1862, I, thinking that the boat 
owners had some right to complain of the company for the 
imperfect manner of keeping the river in order, persuaded 
the directors to undertake the work of improving the river 
themselves, and in 1863, after one dividend was declared, the 
board determined not to declare any further dividend, but to 
use all the income of the company in improving the river and 
putting it in good boating condition. After that time no 
dividend was declared. From the summer of 1862 to the 
spring of 1865 the river was kept in good boating order. At 
the latter date the steamboats were taken possession of by 
the Federal army, and no work was done of any consequence 
by the company up to the time of the sale by the State. The 
steamboat companies ran their boats regularly on the river 
from the fall of '65 to the time of the said sale, but refused 



"<» Document No. 11. [Session 

during the whole time to pay any tolls or to make any returns 
of freights carried by them, to the said company. I have no 
data upon which I tan make an accurate estimate of the 
amount of business done by the steamboat companies, but 
from information in my posses.- ion, I am satisfied that the 
busim ss was large, and their actual receipts exceeded that of 
any period previous to the war. 1 think the tolls for the 
same period would have reached at hast $30,000; the State 
holding rather more than one-third of the stock, would have 
been entitled to more than one-third of that sum. After the 
boats began to run in the fall of 1865, the company, through 
me as its agent, appointed agents at Wilmington, and made 
arrangements to demand its legitimate tolls from the different 
boat lines. Payment was refused and the owners of steam- 
boat companies procured the introduction and passage of 
a resolution in the Legislature, in the early part o! the 
fall of ISfiG, directing the Attorney General to investigate 
the affairs ot the Cap<- hear Navigation Company and to 
report, whether in his opinion it had violated its charter. 
A thorough investigation was made by the Attorney 
General, and in the latter part of that year he m 
a report, accompanied with a large amount of testimony 
which had been taken to be used before him, recommend- 
ing that no proceedings be taken against the said Com- 
pany for any alleged violation ot' its charter. The written 
contracts herein before spoken of. made by the said Navigation 
Company with Orrell and with Lutterloh, to do the necessary 
work on the river, were filed as pari of the evidence in the in- 
vestigation before the Attorney General. Since that time I 
have made diligent search and inquiry foi these contracts, but 
have not been able to find them, and am informed that the 
report of the Attorney General, and the evidence and pa] 
accompanying it, cannot now be found. After the reporl "t 
the Attorney General was made, the owner.- of the different 
steamboat companies procured the passage of another resolu- 
tion, directing the Solicitor of the Fayetteville circuit to com- 



IS 71-' 72.] Document No. 11. 71 

mence proceedings in the nature of a quo warranto, against 
the said Navigation Company, to vacate its charter for alleged 
violations thereof. Under this resolution, proceedings were 
commenced by the (Solicitor, and a trial was had at May term, 
1868, of the Superior Court of Cumberland county. The jury 
failed to agree, and the case was continued until alter the sale 
of the State's stock in the said Company, when it was dismissed. 
I am informed by Mr. Archibald McLean, at that time repre- 
senting in the Senate of North Carolina the district of Cum- 
berland and Harnett counties, that he was appointed chairman 
of a committee, which was intended to be a committee on the 
subject of the Cape Fear Navigation Company ; that they 
held an informal meeting, at which it was agreed by the com- 
mittee to adopt the recommendations of the Attorney Gen- 
eral ; that it was afterwards discovered that by a clerical error, 
it was made a committee on the Cape Fear and Deep River 
Navigation Company ; that another committee was then ap- 
pointed on the subject of the Cape Fear Navigation Company, 
of which Col. E. D. Hall, of "Wilmington, was chairman, by 
whom the said resolution was introduced. 

For the purpose of protecting the Navigation Company in 
the proceedings against it, the Company sought the aid ot the 
Literary Board, of which the Governor was < c officio chairman, 
which was not rendered to it. Mr. Wiley, the Superintendent 
of Common Schools, was the only party who manifested any 
interest in the subject. T file herewith a letter from Gov. 
Worth, dated the 12th of July, 1867, on the subject. Gov. 
Worth told me in conversation that the reason he would not 
interfere in the matter, was that he was interested in one of 
the steamboat lines on the Cape Fear river. I also filed the 
letter from C. II. Wiley on the same subject, dated April 4th, 
1867, another May 21st, 1807, and the other May 21st, 1868. 

After the attempted trial of the suit, I came to Raleigh, and 
had a conversation with Gov. Holden and Mr. Ashley, in 
which I gave them a full explanation of the state of the affairs 
of the Company and my opinion of its value, and urged them 



72 Document No. 11. [Session 

to unite with the private stockholders in protecting its charter, 

which they promised to do. I think the statement, before 
famished Mr. Ashley, was made before that time- 
in connection with a letter addressed to D. A. Ray, President 
of the Cape Fear Navigation Company, which letter was kid 
before the Governor and the Superintendent of Public In- 
struction. The conversation with these gentlemen took place 
some time in the session of 1868- , 69. 

I tile herewith three letters from S. S. Ashley, Superinten- 
,t ot Public Instruction, dated respectively February Oth 
and 26th, and April the Gth, 1869, on the same subject. 



Raleigh, May 23d, 1871. 

Examination of W. X. Tillinghast, resumed. 

At a meeting of {he Stockholders of the Cape Fear Naviga- 
tion Company, held in the town ot Fayetteville on the 18th 
of June, 1869, the following resolution was adopted on motion 
of Bart Fuller, Esq. : 

"Whereas, it is well known that since the termination of the 
'ate war, this company has ceased to perform its duties in 
opening the navigation of the river, aud keeping it free and 
unobstructed, and has been entirely without means or machi- 
nery to commence or prosecute the work necessary lor that 
purpose, the stockholders consider the action ot the former 
officers in instituting proceedings at law against some ot the 
boat owners tor the collection of tolls is harsh and op] 
in spirit. 

It i.-> therefore r< ; era! meeting. 

1. That the President of this company be instructed to dis- 

.i actions ;d law now pending against boat owners for the 
collection oi toll.-. 

2. That, in future the nett balance of all tolls collected after 
deducting the necessary current expenses of the company shall 



lS71-'72.] Document No. 11. 73 

be applied exclusively to the permanent improvement of the 

navigation of the river, as contemplated by the charter of this 

company, until the same shall be completed ; and that the 

president and directors shall have charge of such improvements 

with authority to employ such assistance as they may deem 

necessary tor the successtul prosecution of the work. 

3. That all recorded obligations or engagements of the 

former officers of this company to pay money, whether for 

salaries, the employment of attorneys, or other expenses not 

connected with the improvement of the navigation during the 

time that its operations have been suspended are considered 

by this meeting as unauthorized and without binding force 

upon the company, and the present officers of the company are 

hereby instructed to regard and treat them as such." 

* * * * -:*■ * * ->:- -x- * 

For the ten years beginning 1851, and ending with the year 
1S60, the average annual dividends amounted to within a very 
small traction of six per cent, on the par value of the stock, the 
total amount. paid to the State during that time being $18,850. 
I think the river could be put in thorough navigable order 
with jettees &c., at an expenditure ot from $6,000 to $7,0< hi. 
I think that $2,000 per annum would keep it in permanent 
good condition. 

I think the tolls on freight, exclusive of passage money, at 
an average of ten per cent, on the gross freights would be from 
$0,000 to $S,000, and that the toll on passengers, if levied, 
would be about half as much. 

For several years, perhaps ten, before the war, the market 
value of the stock was about $20, per share, sometimes going 
above that sum, and I know of no sale during that time for less 
than that. Since the war, a small lot was sold in 1S0S or 1S69 
at $9,00 or $10,00 There has not been much bought or sold 
since the war but I think the market value has been from 
$7,00 to $10,00. 

Sworn to and subscribed before the commission. 

W. X. TILL1XGHAST. 



74 Document No. 11. [Session 

APPENDIX TO GAPS l'KAK NAVIGATION COllIPANY. 

Statement of Thos. C. Fuller: 

Shortly after the passage of the resolution of the General 
Assembly, directing the Solicitor ot this District to rile an 
information in the nature' of a quo warranto against the Cape 
Fear >.' ion Company, J, as counsel for the Halcyon Steam 

Boat Company, and Thos. S. Lntterloh, then owning Lutterloh 
Line, prepared the information which was subsequently tiled 
by Neil! McKay, Esq., Solicitor, returnable, I think, to Fall 
Term, L867, the Company answered to that term, and the 
ease was tried before Barnes, Judge, and a jury at Spring 
Term, 1868, the plaintiff being represented by Neil McKay, 
Solicitor, and the counsel employed by the boat owners, viz : 
A. & A. M. Wadded, and B. & T. G. Fuller, and the defen- 
dant by Robert Strange. Esq., Shepherd & Dobbin and M. J. 
MeDuffie, Esq., which resulted in a mistrial, the jury failing 

agree. Before the cause came on to a second trial, the bill 
was passed, authorizing the sale of the State's stock in the 
Navigation Company. 

[ had no knowledge of this bill until I saw its passage an- 
nounced in the newspapers. After I had seen the bill, I, to- 
gether with ray associate counsel, expressed the opinion that 
the bill authorizing the sale of the State's -lock was such a 
recognition of the existence of the company as to amount to a 
waiver of the former causes of forfeiture, and we advised our 
clients that they would best promote their interests by pur- 
chasing the State's stock. Sometime afterwards I was in- 
formed that iho Siatc's stock had been purchased by Thos. S. 
Lutterloh. When the purchase was made, at what price, or 
under what circumstances, I do not know. 

After this, Mr. McKay, the Solicitor, caused the informa- 
tion to be dismissed, I think, by entering a noil qui^ by 
special permission oi the court This was with the full con- 
uurrence of the counsel employed by the boat owners. 

About the time of tiling the information, the Navigation 



18 71-' 72.] Document No. 11. 75 

Company, David A. Ray, President, commenced actions in the 
Superior court, actions of assumpsit, against the Cape Fear 
Steamboat Company, the Halcyon Steamboat Company, and 
Thomas S. Lutterloh for tolls, in all of which I was counsel for 
the defendants. These cases were never tried, and after the 
sale of the State's stock, and the election of Mr. John D. Wil- 
liams, as President of the Cape Fear Navigation Company, a 
resolution was passed in general meeting of the stcckholders 
authorizing the dismissal of these suits, and at this meeting I 
was elected the attorney of the company. Under this resolu- 
tion and by virtue of a special power of attorney, now on file 
in the Superior Court of Cumberland, I had these suits dis- 
missed, as well as I reeolleet now, at Fall Term, 1869. 

TITOS. C. FULLER. 
Fayetteville, N. C, May 8th, 1871. 

Statement of B. G. Worth. 

I have been a stockholder in the Cape Fear Steamboat Com- 
pany continuously from the year 1853 to the present time, and 
have been agent of said company at Wilmington for the same 
period, except the interval from August, 1865 to October, 1869, 
and during that time I was kept closely advised of the affairs 
of the company. The Cape Fear Steamboat Company paid 
tolls regularly to the Cape Fear Navigation Company from 
1853 to the close of the war in the Spring of 1865, conforma- 
ble to the rates established by that company,*at one time 12-i- 
cents on the gross amount of freight earned, and at later period 
lo per cent. We very frequently complained of the Nav- 
igation Company and charged that they were inefficient and 
did not expend in improving the navigation of the river as 
much as they were required to do by the terms of the charter 
and wo in common with other boat owners on the river re- 
garded the tolls as onerous on this account, and were willing to 
pay the tolls, if the money or a just proportion of it thus raised, 
were applied to the purposes contemplated by their charter. 



76 Document No. 11. [Session 

At the close of the Mar in March, 1865, the Cape Fear Steam- 
boat Company was left with one steamer, the steamer A. P. 
Hurt. She was taken possession ot by the United States gov- 
ernment and used by them till sometime in the following 
August. During the last year or two ot the war the Cape 
Fear Navigation Company did hut little to improve the river. 
and it was, and is notorious that the result of the war left tins 
company without means or appliances to prosecute the improve- 
ment of the river, and much ot the stock was owned, as was 
alleged, by parties who were notable to contribute means for the 
prosecution of the work. The Cape Fear Steamboat Co. believ- 
ing they could not properly be required, to pay tolls where 
no equivalent was rendered, or until the Navigation Company 
had performed their duty as required by their charter, such as 
removing fallen trees and logs from the channel of the river, eve., 
refused to render lists, and pay tolls, and as it was absolutely 
necessary that work should be done to the river, the Cape Fear 
Steamboat Co., at their own expense did employ hands, and with 
such appliances as they could command, remove the most danger- 
ous obstacles to navigation, during the year 186(5 and 1S67, at 
a cost to said company of probably seven to nine hundred dol- 
lars, when the Cape Fear Navigation Company instituted 
suit against the Cape Fear Steamboat Company for the re- 
covery of these tolls, they having for the then past eighteen 
months to two years, done nothing to improve the navigation 
of the river. The several boat companies on the river made 
common cause against the Cape Fear Navigation Company, and 
procured the action referred to before during this investigation. 
calling on the said Navigation Company to show cause why 
they had nol forfeited their charter. During the pendency of 
this BUit, and, after a trial had been reached, in which the jury 

could not agree, the Legislature of North Carolina passi d an 
act authorizing the sale of the State's stock in the Cape Fear 
Navigation Company. So far as 1 know and believe, none ot 
the Agents or stockhoW i of the Cape Fear Steamboat Com 

pany had any hand in procuring said act. Nor did they ever 



1871-72.] Document No, 11. 77 

think of buying said stock till the act of the Legislature author- 
ising the sale appeared. Worth and Worth acting for them- 
selves and in the interest of the Cape Fear Steamboat Com- 
pany, were advised by their Attorney that the non-forfeiture of 
the charter of the Cape Fear Navigation Company, being thus 
recognized by the Legislature, and as our Company was sned 
for tolls accumulated since August, 18G5, we could hut protect 
our interests, and that of the Cape Lear Steamboat Company, 
for "which we were acting, by the purchase of this or any otheT 
stock of the Navigation Company, and we acted on that ad- 
vice. As we could not attend in person, we agreed with John 
D. Williams, who was also interested in a line of boats, but 
who was liable with us for back tolls, that he should negotiate a 
purchase of stock so as to secure a majority and give us con- 
trol of the improvement of the river, so that the tolls collected 
could be applied to the improvement of the navigation ot the 
river. Work was done and money expended, as has before- 
been shown, and no demand was made for the payment of any 
tolls at Wilmington till about the 1st of October, 1870, 
said work having been done in the summer ot 1870. 
I was appointed to collect tolls for the present navigation 
company at Wilmington and served notices on the several 
stock companies now on the river. Regular monthly returns 
have been made b} T all the companies (to- wit) Express Steam- 
boat Company, Cape Fear Steamboat Company, and the Peo- 
ples Line, as also for a time the Steamer Halcyon now not on 
the Cape Fear. All the said boats and companies have either 
paid or secured the tolls except the Peoples Line. Their Presi- 
dent F. W. Iverchner, refuses to pay the tolls and has given 
bond and security for the same as provided in the charter. 
The tolls from Oct. 1st, 1870, to April 1st, 1871, reported to 
me. and secured by the Peoples Line as above, amount to 
about $1,500 for down tolls. 1 have no memoranda before me 
but I think this is very near the amount. The rate of tolls 
was admitted to be excessive, and as soon as the money expen- 
ded was supposed to. be returned to the navigation company, 



r8 D«»n mi:nt N<>. 11. [Session 

the tolls were reduced almost one half. I never thought of 
buying the stock to make the river ;i free river. Nor did I 
ever hear of such as nt or inducement 1 oul to 

■ 

the having the management of the sale oi her 

stock till since the announcement by the Peoples line that they 
would pay no tolls to any navigation company on the < 

ir river. It was intimated to me by F. W. Kerchner that 
liis company would be willing to become a partner with the 
Cape Fear Steamboat Company and the Express Company, 
if we would sell them at cost, an equal interest with ourselves. 
This was about the 15th ot Jan., 1871 . I replied that I did 
not think our company would do so, but I thought he could 
buy an equal amount of stock at $10,00 per share, lie re- 
plied "if you can buy for me 300 shares, at $10,00 per share 
buy it, and draw on me at sight with stock attached." lie 
subsequently told me this offer was made on his own account 
and not for the company. 1 understood it, when first pro- 
posed, to be an offer to buy for account of his company. 

The present investigation was procured, as is well known, by 
the owners of the People's Line. 

The Cape Fear Steamboat Company, or its agents, were in- 
strumental with the other boat companies in procuring the ac- 
tion in Cumberland Superior Court, to inquire into whether 
the Navigation Company had not forfeited its charter. Also 
in procuring the passage oi the resolution by the Legislature 
of 1866 and 1867, instructing the Solicitor to file an informa- 
tion against the Cape Fear Navigation Company, and also em- 
ployed counsel to appear before the Legislative committee and 
the Superior Court of Cumberland county. 

B. G. WOETH. 

Sworn to before me, W. M. Shipp, Chairman. 

Statement of D. Gh MoRax. 

Called upon to make ft statement relative to a sale made by 
me, at auction, in the town of Fayetteville, North Carolina, of 
some of the stock in the Cape Fear Navigation Company, I 



1871-'72.] Document No. 11. 70 

state, that on the 7th clay of January, 1SG0, I sold one share of 
said navigation stock at auction, belonging to the estate of 
James G. Cook, Bankrupt, when Thomas S. Lutterloh, be- 
came the last and highest bidder, at the sum of four dollars. 
And on the 11th day of October, 1869, I sold the one-fourth 
interest of Benjamin Bush, Bankrupt, in thirteen shares of 
said Navigation stock, when Thomas S. Lutterloh, became the 
last and highest bidder for said interest, at the sum of one 
dollar, and at the same time, I also sold the interest «f said 
Rush, in the one-fifth interest in six shares ot said Navigation 
stock, when Thomas S. Lutterloh became the last and highest 
bidder, at the sum ot one dollar. The sale of Benjamin 
Bush stock was embarrassed by the fact, that it had previously, 
to-wit : On the 25th February, 1SGG, been conveyed in trust, 
to William M. Parker, ■• among other property, to secure cer- 
tain debts &c, and the trust had not been closed, so that that 
sale, cannot be considered as any criterion of the value of the 
Cape Fear Navigation stock at that date. 

D. G. MACKAE, 
April 21th, 1871. 

Statement of G. Z. French. 

George Z. French deposes that he was a member of the 
House of Representatives at the time the bill was passed lor 
the sale of the State stock in the Cape Fear Navigation Com- 
pany: that he favored the bill from the representations made 
to him by those friends to the measure outside of the Legisla- 
ture representing to him that steamboat owners desired to 
purchase the stock in order to sink it and make the river a tree 
river: that he proposed to repeal the charter but those lobby* 
ing for the bill objected because they said it was a vested right 
and it was d oubtful whether that could lie done. ]\Iy under 
standing is that these suggestions came from the friends and 
representatives of the steamboat companies then navigating 
the Cape Fear rivtr from Fayctteville to Wilmington. And 



v " ! '"< imknt No. 11. ->ion 

troni these representations ! was induced t<> Pavor th hill 
authorizing the sale oi the State stock. 

GEO. X. FRENCH. 
n',1 toand subscribe before me, W. M. Sitipp. 

Statement in the matter of Tin: Cape Fear Navigati 
Company. 

The various acts oi the General Assembly, which together 
make up the charter of the Cape Fear Navigation Company 
are, 1st. The act of 1796; 2d. 1797; 3d. The act of 1815; 
4th. The act of 1821 ; 5th. An explanatory act of 1823, and 
6th. The act of 1832. entitled an act amending, &c. 

Under and by virtue of the powers granted by the act of 
1796, and continued, enlarged, and explained by the other 
acts aforesaid, the said company has exercised corporate 
powers and privileges. 

The complainants aver that the object ot incorporating this 
company and granting to them the very extensive privileges 
contained in their charter was not for the purpose of benefit- 
ting the corporation solely, but was mainly to authorize and 
enable them to make free and keep open the uavigation of the 
liver Cape Fear between Fayetteville and "Wilmington, and 
such other portions and branches as are required by the 6aid 
charter or may be reasonably implied therefrom. Complain- 
ants aver that by some of the above recited acts, to-wit : Tim 
act of 1815, it was made the duty of the company every 
25th year to make return to the General Assembly of the 
amount of tolls received by them for the preceding 25 years 
and g nerally of all the operations of the company for that 
period. By an act of 1829, entitled an act concerning the 
c >mmissioners oi Public Works, this company was directed 
to make report annually <n or before the third Monday of 
November in each and every year, to tlie Board of Internal 
[mprovementSj in detail of all the operations of the company, 
its profits. i, dividends and expenditures, and a general 

statement of i's condition. And complainants aver thai the 



1871-72.] Document No. 11. 81 

made in the year 1863. Yet it is positively charged that no 
such report was then made. And it is also shown that the 
said act of 1829 did not operate as a repeal of the act of 1815, 
requiring reports every 25th year, but that annual reports 
required were in addition to those every 25th year. The 
complainants aver that the last 25th yearly report was made 
in the year 1838 and that a similar report should have been 
company has neglected to make its annual report to the 
Board of Internal Improvements for years past. As to the 
character of the Cape Fear river, the obstructions and im- 
pediments to navigation, together with the necessity for con- 
stant annual attention by this company to prevent the nav- 
igation from becoming difficult and hazardous, reference is 
made to the answer of said company, filed in the Supreme 
Court at June term 1852 ; to the information of Mr. Eaton, At- 
torney General, upon the relation of John D. Williams, partic- 
ularly to those portions of said answer marked numerically 182, 
&c.j which answer, with the exhibits is herewith filed as part 
of this statement. And complaints aver that from the evidence 
taken in this case and the answer of said company it is appa- 
rent that unless a force ot fifteen or twenty men, with the 
necessary number of flats and the proper appliances for sluicing 
the channel, removing obstructions therein and cutting away 
the leaning trees, be kept upon the river for five or six months 
of each year, the navigation will not be open when the water is- 
low, but that boats will only be able to pass in times of freshet 
or when the water is so high that channeling is not required. 
It is submitted that in high water there is no necessity for any 
work to be done on the river, for then by the operation of 
natural causes, the navigation is tree, and as the navigation is 
only impeded when the water is low it is only at such times 
that the efforts of the company are required, and it was only 
for the improvement of the river at such times that the charter 
was granted to the company ; and the complainants now aver 
that the charter of said company should be declared forfeited 
by reason of the non use and abuse of the franchise ; the evi- 

6 



82 Document No. 11. [Session 

dence of which are contained particularly in the depositions of 
Captains A. P. Hurt. 11. M. Orrell, James O. Barry and Sam- 
uel W. Skinner, all of whom are gentlemen of the highest 
character for veracity and have had large experience in the 
navigation ol the river ; and that the same is evident from the 
depo.-itions of Capt. Driver and also of John II. Hall, a direc- 
tor, and William N. Tillinghast, the General Agent of the 
Company. And while it is admitted that the character of the 
witnesses for the respondent is fair, and while attention is not 
called especially to the evasiveness of many of their answers, 
yet their means of forming opinions and giving a knowledge 
of the character of the river and its capabilities, is upon their 
■own showing, much less than that of the experienced men 
examined by complainants. 

The complainants desire that it should be constantly borne 
in mind that it was not the intention of the Legislature to have 
the navigation of the river made better than it was in 1796, 
(when it was a canoe stream) nor to have it put in such con- 
dition that boats could pass over it in high or good water, 
neither was it contemplated that the river should be made so 
far navigable that live or ten steamboats might pass per week 
or that they should make their trips in from 12 to 1G hours. 
But it was expected (and fur this purpose was the charter con- 
ferring extraordinary privileges and of the longest duration 
granted) that the river should be rendered as navigable as nature 
assisted by the best art can make it to be. In other words, 
that the navigation company should pnt the river in such con- 
dition and keep it so that boats may be delayed and hindered 
only by the want of water in the river. 

Attention is therefore invited to the condensation of the tes- 
timony offered by complainants and respondents. The first 
witness, ('apt. A. P. Ilurt, who knows the river between Fay- 
ctteville and Wilmington well, and has been running on it as 
captain of a steamboat for eighteen or nineteen years past, 
deposes in substance, as follows: "That the river is subject to 
numerous obstruction-, caused principally by trees falling in, 



1871-72.] Document No. 11. 83 

which usually lodge where they fall or float to the shoals and 
lodge there. If these trees are suffered to remain they pro- 
duce, whereon they lodge, a great accumulation of sand, which 
of course, makes shallowness of water. It is therefore abso- 
lutely necessary that such trees should be immediately re- 
moved, and these tiees which fall during every season, are so 
numerous that he could not undertake to state their number. 
They could of course be removed and the means required lor 
their removal would be (2) two flats with apparatus for raising 
logs, and about (15) fifteen men. By the use of these means 
M'ith (2) two general trips through the line during the year 
and at low water, together with the jettees where the shoals 
form, to concentrate and deepen the channel and the cutting 
away of projecting trees, the navigation could be kept free and 
open. . The Cape Fear Navigation Company have not such 
means and appliances needful to keep the navigation free, nor 
have they any hands employed in removing obstructions, nor 
have they either flats or men employed for eighteen or twenty 
months. Indeed the Company is not now giving any attention 
to the removing obstructions from the river, nor have they 
given any for the time above stated. The condition of the 
navigation is very bad indeed and dangerous to the boats, 
because such obstructions as described are allowed to remain, 
and by the statement that the navigation is bad and dangerous, 
he means both in good and low water. This is caused by neg- 
lect to keep the river properly cleared out, and the remedy is 
to piit on the proper force and use the necessary appliances. 
Several flats and the steamers North Carolina and Rowan were 
injured by snags in the channel of the river. In the last seven 
years, and when the water was sufficiently high to permit of 
the running of the boats if the obstructions had been removed, 
he has had to stop his boat and with his own crew remove 
obstructions from the river. And this has happened as many 
as six times, and during the same time he has very frequently 
had to stop for days at the jettees, three miles below Fayette- 
ville, with boats and flats detained there for the want of small 



v 4 Document No. 11. [Session 

labor on the jettees. Within this whole time there has not 
been a sufficient force put in the river early enough in the 
season to effect much good. The main "work on the river 
ought to be done at low water, and until the water is low no 
work is needed, but tailing trees ought to be removed at any 
stage of the water, and when the water is from 3 to 5 feet deep, 
landslides can be removed, lie has an indistinct recollection 
that one Jack Evans attempted to work on the river during 
the summer and tall of 1S62 but the work was inefficiently 
done, and the cause ot the small amount of the work was not 
because of the shortness of the season but by reason of the 
fact that he began too late with a small force and with ineffi- 
cient appliances. In the most cases the work has been in 
charge of unskillful men and he does not think the man Evans 
spoken of above was ever a pilot on the river. lie does not 
recollect that the jettees were worked on in 1S02, and if 
Nathan McGuire worked on the river in 1S63, yet he was not 
a pilot, and he has not seen an efficient force on the river for 
the last several years, during the time Capt. Driver worked on 
the river. Although he (Capt. Driver) was an efficient man 
still the inadequate force and appliances and the shortness of 
the time he was at work, prevented him from doing much on 
the river. Capt. Orrell and Mr. Lutterloh also had contracts 
to do work on the river, but the work was not efficiently done. 
The government had control of the steamboats from the 12th 
of March to the 12th of August, 1805. The running time 
down the river is 12 to 13 hours and up 10 to IS hours. If 
the river was put in good order, cleared of logs and trees, and 
if the jettees were constructed in the shoals it might be kept 
in like order for s2,5(>0 per annum for all expenses. It would 
co6t from &4,t.Miu to $5,000 to put it in good order. The two 
flats which the company had in the river were sunk long before 
the government took possession and control of the navigation 
of the river. Work could have been done on the jettees when 
he was delayed there. The company is not building any boats 
and has no appliances for removing obstructions on the river. 



1871-'72.] Document No. 11. 85 

The company has do capital or effects out ot which to build 
boats so far as he knows.'" 

Capt. Ii. M. Orrell the next witness for complainants says : 
" He is acquainted with the Cape Fear river and its navigation 
between Wilmington and Fayetteville and has been for the 
last 18 years. At present the navigation is very much inter 
rupted by snags and logs in the river, and the jettees are exceed- 
ingly level. In some places there are scarcely any at all, more- 
over, there are sand bars where the navigation might be greatly 
improved by work. He does not regard the navigation as sate 
and certain. On the contrary he looks upon it as exceedingly 
hazardous. This results from the fact that there are snags, logs 
and old hulks of boats in the river which made it more hazard- 
ous than he has ever known it before. He states that this has 
.been the case for two years and that it is possible and practica- 
ble to make the navigation of the river free with the expendi- 
ture of sufficient work, but that the navigation company is 
doing nothing at all upon the river ; that the obstructions so 
endanger the navigation that boats could not pass even if there 
was not sufficient water independent of the obstructions. That 
in the last 7 years many boats have been snagged, and lie has 
lost many rudders. That his boats have lost much time by 
reason of the obstructions and he does not believe that the river 
has ever been cleaned ont. He does not think the company 
energetic and efficient, and he does not know of its having any 
means on the face of the earth. On his cross examination he 
states " that he does not know of any tolls being paid to the 
company within the last year. He had a contract to work on 
the river for two years ending, he thinks, in June, 1S66. That 
he was so much hampered by instructions from the agents that 
the work he did was of comparatively little service." There 
is much other testimony in this deposition of a similar character. 

Capt. James O. Barry, who has been on the river as captain 
of a steamboat fo r the past five years and who is not interested 
in any boat whatever, fully corroborates the testimony ot Cap- 
tain Hurt and Orrell. (See his deposition.) 



SG Document No. 11. [Session 

Capt. Samuel W. Skinner, who has been on the river as 
captain of a steamer since August, 1SG5, also corroborates 
Captains Hurt, Orrell and Barry, states certain facts with re- 
gard to the entire inefficiency of the company more fully and 
forcibly perhaps than either of the others. (See his de] isition.) 

Capt. Wm. M. Driver, witness for respondent dues not, it is 
believed in a single material particular contradict the state- 
ments of either of complainants' witnesses but on his cross ex- 
amination fully corroborates them. 

Mr. John II. Hall, a director, states principally matters rela- 
ting to the organization of the company, and little if anything 
as to the present condition of the river navigation. 

William jN\ Tillinghast, General Agent of the company fails 
to show much that is material, except that the company made 
no efforts to build their boats or resume work on the river until 
after they had notice that this proceeding was instituted. It 
is thought that Mr. Tillinghast's testimony shows that if it had 
not been for the resolution of the General Asscmblv under 
which you are now acting, that there would have been no show 
of activity on the part of the company, or nothing to indicate 
that they had not wholly abandoned the river. 

They did not work at all for 18 or 20 months though they 
well knew that work was imperatively needed and they have 
not yet used the summary means conferred by their charter or 
any other to collect the tolls which they allege to be due. It 
is manifest from the statements of Hall and Tillinghast, though 
they seem to be reluctant witnesses except for the respondents, 
that this is one of the most totally irresponsible companies in 
this or any other State. 

And now it is submitted that the Gape Fear Navigation 
Company is one of these old and effete concerns which is not 
alive to the demands oi enlightened commerce, is entirely be- 
hind the justly progressive ideas of the age, and to permit it 
longer to remain in existence is to retard the business of the 
most flourishing inland town in the State, and to seriously im- 
pair the trade of the best and most important seaport. During 



1871-72.] Document No. 11. 8T 

the half century it has lived, it has done comparatively little, 
and the chief object of its management seems to have been to 
get large sums of money as tolls for the doing of work which 
cost annually, (some few hundred dollars.) For proof see answer 
annexed. 

But it will be said the war has ruined the company. How? 
It had only §3,900 in confederate treasury notes on hand, and 
its fiats were sunk before the collapse. It was not impossible 
to have got a good superintendent during the war. Capt. Dri- 
ver, (white man,) was always to be employed. The company 
need not attempt to excuse itself for its short comings for the 
past two years, (there is no excuse for that,) for it testimony 
be worth anything, it is amply proved that it has been ineffi- 
cient for a great while, and its failure to make report according 
to the requirements of its charter shows its full knowledge of 
its inefficiency and irresponsibility. 

. It is confidently asserted by complainants that they can pro- 
duce, when required to do so, a large mass of the most con- 
vincing proof in addition to that set forth here, that this com- 
pany has most grossly abused its chartered privileges. 
Copied from original, signed. 

A. M.^WADDELL, 
THO'S. C. FULLER, 
Solicitors for Complainants. 

Affidavit of R. M. Orrell, before the Committee of In- 
vestigation, with regard to the purchase of the State's interest 
in the Cape Fear Navigation Company. 

Under an agreement between Mr. J. A. Worth, T. S. Lut- 
terloh and myself, owning and running boats on the Cape Fear 
river, Mr. T. S. Lutterloh and myself came to this city in 
September, 1869, to make some arrangement with the proper 
officers of the State, in the matter of the State's interest in 
the Navigation Company. 

At a suggestion of Governor Worth sometime previous, 
we made a proposition to purchase the State's interest, which 



Dcx i me.nt No. 11. [Session 

proposition was discussed by Mr. Ashely, Governor Holden, 
and I think, the Legislative Committee and the Committee on 
Internal Improvement in the General Assembly. Mr. Lutter- 
loli and myself submitted as correct a statement ot the condi- 
tion of the Company, as we well could without the books of 
the Company. I mean here with regard to the liabilities and 
assets of the Company, which was I think to the effect that 
tha Company had no property, not a dollar of capital, and was 
in debt to the amount of twenty thousand dollars, or near 
that. The capital of the Company had been sunken or other- 
wise Appropriated, so that the stock was not worth much, if 
anything at all. But to relieve ourselves ot what was regarded 
as an imposition, we offered $5 per share for the stock, and 
said to the Superintendent of Public Instruction, that we would 
keep the river in as good, or better order tor navigation than it 
had been kept in ; that the public interest could not therefore 
suffer trom the State giving up control ot this Company : that 
we. as boatmen, could not afford to let navigation be inter- 
nip led. which declaration on our part removed the objection 
on the part of the State, to parting with her interest, and left 
only the question of price to be settled. And while that mat- 
ter was pending, Mr. Lutterloh received a dispatch of a private 
character that caused him to return home without a moments 
delay. Finding myself thus suddenly deprived ot Mr. Lut- 
terloh's co-operation and support, I again called on Mr. Ashley, 
and also on Governor II olden, and informed them of the melan- 
choly character of Mr. Lutterloh's dispatch, and asked that the 
matter might be permitted to rest until we could return again 
together, which proposition both gentlemen promptly 
acquiesced in. and so remained until Mr. Lutterloh and 
Mr. J. I). Williams visited this city on the same business. 
While Messrs. Lutterloh and Williams was in this citv, I re- 
ceived a letter trom Maj. T. A. Byrne, stating that the above 
named gentlemen were in the city, "trying to get the naviea- 
tion stock," and that he had Control of the stock, and if it would 
operate against my interest or plans hereto-fore prepared to the 



1871-'72.] Document No. 11. 89 

Governor or Mr. Ashley, "they should not have it." In reply 
to which I said that Mr. Lutterloh and myself were repre- 
senting the same interest, and whatever Mr. L. did would, I 
presume, be what Loth of us would do it I was present ; that 
I did not know that Mr. Williams had anything to do with the 
matter, as I had not, up to that time, heard that he had pur- 
chased an interest in Mr. L.'s boats. I think Maj. Byrne told 
me that he got about rive hundred dollars ($500) for it. We 
proposed to pay in proportion to our tonnage for the stock, and 
sink it and make the river a free river. We promised to keep 
the river in as good order as it had been kept in, and we hoped 
to improve the navigation some. To do this, we agreed to 
contribute a sufficient amount to pay for the labor, and to ask 
the same of any new boat that might come on the river. Mr. 
J. P. Williams said he had paid or it cost them about $1,100, 
which I understood him to mean in excess ot the purchase 
money. The above proposition to purchase and sink the stock 
and make the river a free river, was proposed by the boat 
owners on the river to Messrs. Ilolden and Ashley and to the 
legislative committee and to other members of the legislature, 
to induce the legislature to pass an act authorizing the sale of 
the stock, and the Board of Education to complete the said 
sale. It was a clear understanding that the boat owners were 
to pay for this stock in proportion to the charge, and to sink 
the stock, making the river free, and after the stock was pur- 
chased, I was informed by the attorney, I think, that a different 
arrangement had been made, I having proposed to carry out 
the first named agreement in good faith. I have as large expe 
rience as any man in the business on Cape Fear river, and 
regard the Navigation Company as an imposition upon the 
boat owners and the public. 

R. M. OEEELL. 
Sworn to before me June 10th, 1871. 

W. M. SIIIPP, Chairman. 



90 Document No. 11. [Session 

I am acgainted with the condition of the Cape Fear Xaviga 
tion Comj aiiy's business, and think the price for which it was 
sold was a full price and valuation for it. I mean that the 
State's stock was sold for every cent it was worth, and I think 
for more than it would have brought at auction. From my 
knowledge of the river, it is necessary that work should he 
done every year on it to keep the navigation available, and the 
river in such condition that boats can run. 

R. M. ORRELL. 

Statement of John M. Hose : 

J. M. Pose states that his children's stock at first was not 
represented in the meeting for the reason that it was repre- 
sented to him that if the parties organized, they would dismiss 
the suits for tolls and manage the company against the interest 
of private stock, and they would get nothing. ' k Mr. John D. 
Williams said they had no disposition to injure my stock, and 
I had better protect it by going with him. I did so, and am 
now Secretary of the Company. The Company demanded 
tolls from 17th October, 1870, to 10th March, 1871, as follows, 
viz: as in the private rates to be filed, 10 per cent, on gross 
tolls, except in the following, which are specific : 

On rosin, tar and turpentine, 5 cents per barrel. 

On spirits turpentine, 10 cents per barrel. 

On cotton, 20 cents per bale, 

On through cabin passengers, 75 cents. 

< >n way cabin passengers, 50 cents. 

On deek passengers, 25 cent6, 

Prior to the sale of State's stock the company had never 
made a charge of toll on passengers. On 10th March, 1871, 
the specific rale was reduced as follows, viz : 

Rosin, tar and turpentine, 2$ cents per barrel. 

Spirits turpentine, 5 cents per barrel, 

Cabin passengers, 30 cents. 

Deck passengers, 10 cents. 

The charge on gross freight ttill remain 10 per cent. The 



1871-72. Document No. 11. 91 

former Secretary, Mr. "William N. Tillinghast estimates the 
tolls accrued and owing by the Steamboat Companies from 
August, 1SG5, to the day of sale of the State stock to be about 
830,000, of which one third ought to be due to the State. The 
individual stockholders, before the purchase of the State stock, 
thought it a violation of their rights for the new owners, con- 
trolling the company at the meeting after the sale ot the State 
stock, to pass a resolution voting to the steamboats indebted, 
the tolls which were the honest dues of the company, and in 
which the private stockholders had a vested right. My opin- 
ion is, from my best information, that the Cape Fear Steam- 
boat Company had owed at least $15,000 of this sum, their 
capacit}' for carrying being at least one half of the carrying 
capacity employed on the river. At least 100 shares of the 
capital stock, standing in the name of individuals, is entirely 
unrepresented by any living claimant, nor is it ever likely to be 
claimed by any one. And thus it is (in case there are no heirs) 
all of the owners of this stock have been unrepresented for 
twenty years, and most of it for 10 years, and the owners of it 
cannot now be found. I think the market value of the stock 
before the war, was about twelve and one-half dollars per 
share. The highest bid I ever knew was fifteen dollars. I 
think, since the war, there have been such disturbances, there 
has been no settled market value of said stock. The majority 
of the sales have been at five dollars. 

JNO. M. ROSE. 
Sworn to and subscribed before W. M. Shipp, Chairman. 



92 Document No. 11. [Session 

[Copy from records of r>oard of Education.] 

Executive Office, March 31, 1869. 

Meeting of the Board held this day. 

Present, Governor Holden, Lieutenant Governor Caldwell, 
Messrs. Jenkins, Adams. Harris, Ashley, Coleman. 

The minutes of the las f naa&fcwrg .ere read and approved. 

■X- •?£ ■& -rr -K- -X- -X- 

The following ' .iter was read. 

Raleigh, March 24, 1869. 

To Honorable Board of Education : 

I will pay five (5) dollars a share for your stock in the 
Cape Fear Navigation Company. 
Respectfully, 
(Signed) T. S. LUTTERLOH. 

Whereupon it was voted, That the stock owned by the 
Board in the Cape Fear Navigation Company be advertised 
by the secretary for sale until May 1st. 
Adjourned. 

(Signed) S. S. ASHLEY, 

Si cretary. 

Executive Office, May 1, 1869. 

Meeting of the Board held this day. 

Present, Governor Holden, Messrs. Harris. Adams, Cole- 
man, Ashley. 

The following bids for the stock owned by the Board in 
the Cape Foar Navigation Company were received and con- 
sidered : 

( )ne from J. D. "Williams for s2.7o per share. 



1871-72.] . Document Mo. 11. 

One from T. S. Lutterloh for $5.00 per share. 
" " J. A. Byrne, 5 cents more than the highest bid 
per share. 

On motion of S. S. Ashley, it was voted that the propo- 
sition of T. S. Lutterloh to purchase the 650 shares of stock 
owned by this Board in the Cape Fear Navigation Company 
be accepted, and that Gov. W. W. Ilolden, President, be and 
hereby is, authorized to transfer said stock to Mr. Lutterloh. 
Adjourned. 

(Signed) 8. S. ASHLEY, 

Secretary. 

Ealeigh, May 16, 1871. 

I hereby certify that the above transcripts are a true copy 
from the records of the Board of Education. 

S. S. ASHLEY, 
Secretary Board of Education. 



LETTERS REFERRED TO IX THE TESTIMONY OF 
W. N. TILLINGHAST. 

No. 1. Greensboro', N. C, April 24, 1S67. 

Dear Sir : Your suggestion, in your favor of the 13th seems 
reasonable to me, and I have forwarded the letter to Governor 
Worth, with the request that he do as you desire. The Lit- 
erary Board ought to aid in the defence of the charter of the 
Cape Fear Navigation Company, and of all the rights of the 
company ; and I trust that a majority of the members will 
view the matter as I do, and act accordingly. 

The franchise is valuable, and the iuterest of the Literary 
Board is that of the other stockholders. 

Very resdectfully and truy yours, 

C. II. WILEY. 
W. N. Tillinghast, Esq., 

General Agent Cape Fear Navigation Company. 



94 Document No. 11. [Session 

No. 2. Gbeenbboko, N. C, May 21st, 1807. 

Dear Sir : — Your letter concerning the suit against the 
Cape Fear Navigation Company, was forwarded by me to the 
Governor, with our endorsement, expressing my concurrence 
in your views. The Board was called together on the 15th inst., 
.and your letter laid before it. One member was absent from 
sickness, and the Governor suggested that as he was interested 
both ways, that is, personally interested with boat owners, and 
for the State in the Navigation Company, he ought not to be 
required to act. But we could not have a quorum without him, 
and hence it was agreed to lay this matter over till our next 
meeting. The sick member sent his resignation, and a new 
appointment was made ; and, if the gentleman designated ac- 
cepts the position, there will be a meeting called, and action 
taken in regard to the Cape Fear Navigation Company. 
There will probably be a meeting, in any event, in two or 
three weeks. I was directed by the Board to send you this 
information. 

Very truly yours, 

C. II. WILEY. 

W. N. Tii.lingiiast, Esq., 

Agent Cape Fear Navigation Company. 



No. 3. Greensboro', N. C, May 21, 1868. 

My Dear Sir : — If your communications to me and to Gov. 
Worth, had been written a few days sooner, I might have been 

able to have the arrangement made which you desired. 

I received your letter the day after my return from a meet- 
ing of the Literary Board, and I suppose Gov. Worth had not 
received his before I left, or he Mould have mentioned it. I 
tear he will not convene the board for the purpose of sending 
a representative to the meeting of the Cape Fear Navigation 
Company; audit he can appoint a proxy without the loard, 



1871-'72.] Document No. 11. 95 

he will be likely to do so in a way to save expense. It is need- 
less for me to conceal my tears in regard to the interest oi the 
school fund in the Cape Fear Navigation Company; I stand 
alone in the Literary Board in this matter, attaching more im- 
portance to it than my fellow members, and feeling more solic- 
itous for the sccess of the company. If the board had appointed 
me in time I would have tried to go down — and if I were even 
now to receive a commission, I would endeavor to make Dis- 
arrangements to attend your meeting. I write to Maj. Ilusted, 
a member of the board, in Raleigh, and ask him to urge on 
the Governor some action in the premises. 

I am very glad that your prospects for saving the charter 
are brightening, and can only insure you ot my sympathy in 
your struggle for your rights. 

Very truly yours, 

C. II. WILEY. 



No. 4. Raleigh, July 12, 1SG7. 

W. N. TlLLINGIIAST, 

Fayetteville, N. C. 
Mr Deak Sik : — I expect to have a full meeting of the Lit- 
erary Board at 10, A. M., next Tuesday. 

I shall decline to take part in any action on the questions in 
controversy, between the Steamboat Companies and the Cape 
Fear Navigation Company. 

I do not know when the Literary Board will be again con- 
vened after next Tuesday. 

Yonrs very respectfully, 

JONATHAN WORTH. 



96 Document No. 11. [Section 

No. 5. STATE OF NORTH CAROLINA. 

Department of Public Instruction. 
Raleioh, Feb. 9, 1869. 

W. N. TlLLDJGHAST, &6Q., 

Fayetteville, N. C. 

Sin : — Yours dated the. 6$h is at hand. Gov. lloldcn has 
authorized a certain party to investigate this matter, and I am 
only wating for his report, to lay your papers before the Gen- 
eral Assembly. 

Respectfully, 

S. S. ASHLEY, 

Superintendent of Public Instruction. 



No. 6. STATE OF NORTH CAROLINA, 

Department of Public Instruction. 

Raleiqh, February 26, 1S69. 
AV. N. Tillingiiast, Esq.; 

Fayetteville, N. C. 
Sir: — The bill was not introduced into the Senate at the 
instance of the Board of Education. No "Act" to dismiss the 
case will be introduced immediately. 

Respectfully, 

S. S. ASHLEY, 

Superintendent of Public Instruction. 



No. 7. STATE OF NORTH CAROLINA, 

Deiartment Public Instruction, 
UalcUjh, April 6, 1869. 
W. N. Tilling ham-, Esq., 

Fayetteville, N. C. 
Sib : — Yours of the 3d, is at hand and contents noted. 
There is an Act now before the Legislature for the with- 
drawal of the suit, but as they are about to adjourn it, is very 
doubtful if it is acted upon at all. 

Respectfully, 

S. S. ASHLEY, 

Superintendent of Public Instruction. 



1871-72.] 



Document Kg. 11. 



97 



STATEMEXT 

Showing the amount of Dividend paid to the State of North 
Carolina upon the Stock belonging to the State in the Cape 
Fear Navigation Company. 



DATE. 


NUMBEK. 


1819, 


No. 


1 


1823, 


a 


3 


1823, 


u 




1826, 


i» 


4 


1837, 


u 





1829, Feb., 


a 


6 


1827, July, 
1830, 


u 


7 
S 


1831, 


i. 


9 


1831, 


a 


10 


1834, 


a 


11 


1835, Nov. 


a 


12 


1835, Sept. 

1836, March, 


u 


13 
14 


1836, Sept. 

1837, March, 


u 
a 


15 
16 


1837, Sept. 
1838, 




17 
18 


1839, March, 


a 


19 


1839, Sept. 

1840. 


a. 


20 
21 


1842, 


u 


22 


1S43, 


« 


23 


1843, 


a 


24 


1845, 


u 


25 


1846, 


■ i 


26 


1847, March, 
1847, Sept. 

1848, 


a 

a 
a 


27 
2S 
29 


1848, 


u 


30 



AMOUNT. 



Amount forward, 



8 



1,125 
300 

202 
420 



27 



23 42 



361 
392 
392 
556 
566 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
650 
656 
650 



71 

86 
86 
14 
14 



s 18,040 



10 



98 



Document No. 11. 



[Session 



STATEMENT— {Continued.) 



DATE. 


NUMBER. 




AMOUNT. 








Brought forward, 


8 1S,040 


4<> 


1849, 


No. 31 




650 




1S49, 










1850, 


" 33 




650 




185.0, 


" 34 




650 




1851, 


" 35 




650 




1851, 


" 36 




650 




1852. March, 


" 37 




650 




1852, June, 


" 38 




650 




1852, Sept. 


" 39 




650 




1853, 


« 40 




650 




1853, June, 


" 41 




1,300 




1853, 


« 42 




650 




1854, March, 


" 43 




1.300 




1854, June, 


" 44 




1,30< 




1854, Sept. 


" 45 




i ;.-><> 




ls.V>, March, 


" 46 




1,300 




1855, June, 


" 47 




650 




1855, Sept. 


« 4s 




1,300 




1856, March, 


u 49 




650 




1857, March, 


" 50 




650 




1858, March, 


" 51 




650 




1 858, Sept. ' 


" 52 




650 




1359, March, 


" 53 




650 




1>.">9, June, 


" 54 




650 




1859, Sept 


" 55 




650 




1860, March, 


" 56 




650 




L860, June, 


" 57 




650 




1860, Sept. 


" 58 




650 




lM'Jl, March, 


" 59 




650 




1861, Sept 


« 60 




659 




1862, March, 


" 61 




650 




1863, Sept. 


" 62 




650 






s 41,350 


to 



1871-72.] Document No. 11. 99 

The fcreo-oine: statement is a correct abstract from the books 
of the company, so far as they are now in the possession of the 
Secretary. The name of the State does not appear in the list 
of stockholders to whom dividend No. 2 was paid, and he can 
find no dividend list bearing the number 32, which is blank in 
the list prefixed. He thinks there was a dividend No. 32 de- 
clared and paid, which is probably entered upon a book by itself 
which has been mislaid. 

W. N. TILLINGIIAST, 
Secretary and Treasurer Cape Fear Navigation Co. 

Fayetteville, N. C, July 21st, 1S6S. 






6 



100 Doctmext No. 11. ^Session 



INVESTIGATION INTO THE ISSUE OF PENITEN- 
TIARY BONDS, &C. 

Raleigh, May 10th, 1871. 

Col. J. M. Heck being sworn, testified : 

Q. "Were you President of the Deep River Manufacturin, . 

Company when the deed to the Penitentiary site in Chatham 
county was made to the Statu ? 

A. I was. 

Q. "What was the consideration paid '. 

A. Nominal. 

Q. For what did you receive the order for the *oi>,000 of 
State bonds for the Penitentiary ? 

A. In consideration for a conveyance of about 8,000 acres 
of land. 

Q. Did you sell or convey the said 8,000 acres of land to 
the State of North Carolina? 

A. No. 

Q. "Will you explain how it was that you received $56,000 
Penitentiarv bonds for that land '? 

A. We sold this land to D. J. Prnyn, aud we declined to 
make a conveyance until we received an approved order for 
the bonds. 

Q. Had that land been previously sold to the State by 
Pruyn ? 

A. I think it had. 

Q. From whom was the 8,000 acres of land purchased by 
the Deep River Manufacturing Company '. 

A. Principally from the McKays and Douglass. 

Q. "What did your company pay for that land ? 

A. "Without the records I cannot speak positively, but think 
we paid Douglass $5,000 in cash for the 360 acre tract. I 
think wc paid for the mill tra<t s.l.OOO in cash and the w< od 
land (6.0O0 acres and upwards) I think 60 cents an acre. 



1871-72.] Document No. 11. 101 

Q. Was the money paid before the company received the 
bonds, or the proceeds thereof from the State ? 

A. I cannot say positively, but think it was. 

Q. Was the money paid before the contract by Pruyn was 
made with the State ? 

A. I can't say positively about that, but when we paid for 
• this land, I think we expected to get the bonds from the 
other parties (Pruyn). I have not seen the papers for a long 
time. 

Q. Was the land paid for by orders on John G. Williams 
or how \ 

A. I think part was paid in cash to the parties and perhaps 
part in checks. I think checks, if any, were on Williams 
bank. 

Q. Did the company have any deed or conveyance to these 
lands when they made the conveyance to Pruyn ? 

A. We had such a contract with the parties as we thought 
would compel them to a specific performance of it if we had 
no deed, and about which I cannot be [positive unless I had 
the papers. 

Q. Have you any papers which will fix the time of the 
contract with Pruyn, and was that contract written or verbal '. 

A. I think before the deeds were made we had a written 
contract with Pruyn. My impression is that a copy of it is 
now among the papers of the company. 

Q. Were you not in frequent communication with Pruyn 
while the negotiation was going on between him and the 
Penitentiary committee for the purchase of these lands? 

A. I resided in Ptaleigh, which gave him frequent oppor- 
tunities of seeing me. I had conversations with him about 
the matter, but don't remember how many. 

Q. Was not Pruyn your agent in the negotiation lor the 
sale of the lands ? 

A. We regarded him as a purchaser, and not as an agent. 

Q. Was there any understanding between your Company 
and yourself, and Pruyn, that he was to sell the lands to the 



102 Doctmknt No. 11. [Session 

Commissioners of the Penitentiary and divide the profits, or 
proceeds of sale \ 

A. None; there was no such understanding. 

Q. What has become of the bonds received from the State? 

A. We never received any of the bonds, but assigned the 
order tor them, I think, to the State National Bank for a con- 
sideration, which consideration, I think I can state from the 
Company's bank book accurately, and which I will exhibit to 
the Commission if desired. 

Q. Do you know what became of tha bonds which were 
given to Prnyn I 

A. I do not. 

Q. Have you any information from any source whatever, 
that any of these bonds, known as the Penitentiary bonds, or 
the proceeds of them, were paid to any member of the Com- 
mittee to locate the Penitentiary ? 

A. I have not, I have no information on the subject. 

Q. Did you ever hear Pruyn say anything about paying 
these Commissioners, or any one else, any moncv or any bonds, 
or the proceeds of any bonds as a consideration for locating 
the Penitentiary at Lockville '. If so, state fully what you 
heard him say '. 

A. I do not think I ever did. 

Q. Did you ever hear any body else say anything abontpay- 
ing money, bonds, &c, for that purpose \ 

A. I heard a great many rumors, such as were common 
about all legislative action at that time. 

Q. What proportion of the amount realized from the trans- 
fer of the order for these bonds to the State National Bank 
went into the legitimate business of the company. 

A. I think all of it, as has all the other money owned by 
the company. 

Q. Did }ou ever receive anything additional to your salary 
as President of the Company, as a consideration for negotiating 
for the sale of the land '. 

A. I had iio allowance on this account. 



1871- , 72. Document No. 11. 103 

Q. What is the salary of President of your company, and 
when was it last paid you 3 

A. I think there is no fixed salary by the bye-laws. I think 
at a meeting of the Company in December, 1SGS or 1869, 1 
was allowed a salary of $2,000 up to that date. 

Q. Was this immediately after the closing of this sale I 

A. I think it was the end of that year. 

Q. Who were the members of your Company at the time of 
the sale of this land to the State ? 

A. The officers and principal owners of the stock of the 
Company were J. M. Heck, President ; A. B. Andrews, Sec- 
retary and Treasurer ; and G. W. Swepson. 

Q. Do you know whether the company or any member of 
it paid any thing directly or indirectly to the committee, or 
any one of them for locating the Penitentiary at Lockville, or 
purchase of the 8,000 acres of land ? 

A. I do not. 

Q. Do you know, or have you any information from any 
source whatever whether any money, bonds or proceeds of 
bonds or anything of value was paid to any member of the 
Legislature or Convention to procure the passage of any bill or 
ordinance through either of those bodies ? 

A. I have no knowledge of my own, and know nothing ex- 
cept what is given by the tongue of rumor. I have heard 
remarks made in a general way by Deweese, Littlefield and 
others, that the} r held the control of the action of the Legisla- 
ture for money or a valuable consideration. 

Sworn to and subscribed before the commission. 

J. M. HECK. 



Raleigh, May 22, 1871. 

Col. J. M. Heck, recalled. 

Q. Did you know that Pruyn had sold the S,000 acres to 



1' I Doltmkxt No. 11. [Session 

the State, before you sold to him, or before you paid McKay 
and Douglass or either of them for the land j 

A. I don't remember. 

Q. Has your company the written contract made with 
Pruyn ? 

A. I do not know, as most of the papers are now in the 
hands of Capt. A. B. Andrews. 

Q. "Was Pruyn with you at Lockville, when the committee 
was there \ 

A. lie was not with me. lie may have been with the com 
mittee. 

Q. What is your best impression as to his being at Lockville 
at that time, and if there, with whom did he go I 

A. I think I remember to have seen him there once with 
Col. Harris, but don't remember if it was at that time. 

Q. When you saw him there with Col. Harris, had you then 
made the sale \ 

A. I do not remember. 

(J. Did you go up by appointment with Col. Harris to show 
him the 8,000 acres of land, with a view of selling it to the 
State ? 

A. I agreed to meet Pruyn and such members of the com- 
mittee as he might bring, at Dr. McKay's, to show the land or 
get Dr. McKay to show it, particularly the iron mine. I think 
Col. Harris had been sent on the part of the committee to ex- 
amine it. 

Q. Was Pruyn at that time a purchaser or au agent '. 

A. Pruyn was not an agent for our company. I think he 
had an agreement to purchase the land before that time. 

Q. What is the business of the Deep Piver Navigation Co., 
and what is the amount of its capital ? 

A. The company was organized for the purpose of manu- 
facturing on Deep River, and to induce the establishment of 
other manufacturing companies. It was first organized with 
an estimated capital of $100,000 the lands being estimated at 
that value. 



1871-'72.] Document No. 11. 105 

Q. What interest had Mr. G. "VV. Swepson in the company? 

A. Mr. Swepson was one ot the organizers of the company, 
putting in at the time his interest in purchases he had made on 
Deep and Cape Fear rivers,and also some other lands which he 
had purchased afterwards. He had agreed to pay me §10,000 
in money and 4,000 acres western lands for the interest in the 
Deep river. I think there was also some other property put 
in, which I don't remember. I think at the organization of 
the company he represented one third interest. 

Q. Had Gen. Littlefield any interest in the Company I 

A. There was some agreement at some time after the organi- 
zation made by some of the stockholders to sell him one-fourth 
interest in the Company, but no stock was ever transferred 
to him. 

Q. Did he ever pay any member ot the Company, in whole 
or in part, the sum agreed to be paid for the stock that was 
agreed to be transferred to him ? 

[Witness desires time to consult counsel before answering 
this question.] 

Q. Did Gen. Littlefield afterwards buy the whole ot G. W. 
Swepson's interest in the Company ( 

A. I do not know. 

Q Has he or any other person presented an order to the 
Company for the transfer of Mr. Swepson's stock ? 

A. He (Littlefield) never did. Nor do I remember any order 
has ever been presented to the Company tor the transfer of 
that stock. 1 think at one time G. W. Swepson proposed to 
transfer it to the Raleigh National Bank. He afterwards told 
me that he had sold it to Littlefield, who sold it to his brother 
Robert Swepson, who would pay the balance due on the 
property. 

Q. Do you know or have you heard that Gen. Littlefield 
offered to sell the 8,000 acres of land to the Penitentiary Com- 
mittee % 

A. I have no knowledge of any such offer, nor do I remem- 
ber to have heard it. 



106 Document No. 11. [Session 

Q. Did you ask $20,008 for tho site with the increased num- 
ber of acres, with the additional water privileges ? 

A. I think there Mas some oti'er in writing, but don't re- 
member the terms. 

Q. Can yon toll what work was done by Pruyn towards car- 
rying out the contract to build the stockade i 

A. Pruyn hauled one or two hundred sticks of timber to 
the site \ 

Q. What became of them? 

A . I think he owed tor the timber and the hewing or sawing 
of it, to the Lockyille mills, or the parties owning them, and 
that it was afterwards by some arrangement with Pruyn, 
hauled back to the mills and sawed into lumber for the com- 
pany. I think lie owed for the timber by written contract. 

Q- Have you ever heard irom Gen. Littlefield or any one 
else that he (L.) had ever loaned money, or made a present, or 
purchased property from any member of the Penitentiary 
< lommittee ' 

A. No ; about the time of the adjournment of the Legis- 
lature, and after the location of the Penitentiary at Kaleigh, I 
heard that he had bought Mr. Lassiter's land. I am not cer- 
tain but that Mr. Lassiter told me so himself. 

Q. Why did you sell the land to Pruyn instead of selling 
directly to the committee. 

A. I know ot no reason, except that Pruyn offered to buy 
the lands, and the committee did not. 

Q. Was it not understood directly or indirectly between you 
and Pruyn, when you made the contract to sell him the land, 
that if he did not succeed in selling it to the committee, you 
would require him to pertorm this contract with you '. 

A. We had no understanding outside of the contract which 
was in writing. 

Q. Did the written contract bind Mr. Pruyn uncondition- 
ally to purchase the land at .">•'• tStato bonds of $1,000 each ( 

A. I do not remember, but my impression is that I did. 

Q. What means did Pruyn have of paying tor the land if 



1871-'72/| Document No. 11. 107 

he failed to sell to the committee ? Did he own any property 
that you know of ? 

A. He represented himself as a man of means, and I think 
he owned property in this city. I heard of his owning one or 
more houses in Raleigh and a considerable lot of mules. I 
understood they were in the eastern part of the city. 

Q. What means had Pni} 7 n of selling the lands to the com- 
mittee which were not enjoyed by you ? 

A. I know of none. 

Q. Can you give any reason why Pruyn was made an inter- 
mediate purchaser between your company and the committee i 

A. I cannot. 

Q. Who pays the tax on this land (the 8,000 acres) ? And 
in whose name is the land listed for taxation ? 

A. I had the land listed for taxation, because I understood 
that McKay and Scott had entered the most valuable parts of 
it, and I desired to hold the land for the State National Bank 
who I believed to be entitled to it, and this year Mr. John G. 
Williams gave me the money to pay the taxes. For the last 
year the company paid, and have not yet asked Mr. Williams 
to refund. 

J. M. HECK. 

Sworn to and subscribed before the Commission. 



Raleigh, May 11th, 1871. 

Mr. A. B. Andrews was sworn and testified : 
Q. Will you state your connection with the Deep River 
Manufacturing Company, and what you know of the bonds 
commonly knowm as Penitentiary bonds ? 

A. I am stockholder, director and treasurer of the Deep 
River Manufacturing Company. I never saw any of the 
bonds known as the Penitentiary bonds. The Deep River 
Manufacturing Company received an order from the Governor 



L08 Document No. 11. [Session- 

for 56 bonds. I understand that the order was transferred, to 
J. G. Williams, banker. I understood, that these bonds were 
sold to J. G. Williams and that the Deep River Manufacturing 
Company got from 40 to 50 cents on the dollar for them. 
None of the proceeds of the bonds came into niy hands as treas- 
urer, but was received and controlled by Col. Heck as Pres- 
ident at that time. I never had any money belonging to the 
company except what was derived from certain mill property 
owned by the company within the last six months. 

Q. State what you know of the purchase of 8,000 acres of 
land by the company, or of its sale to the State by Pruyn, or 
of its sale to Pruvn \ 

A. I know nothing of the purchase or of the price to be 
paid. I signed the deed to Pruyn for S,000 acres and to the 
State lor 25 acres as Director of the Deep River Manufactu- 
ring Company, at the request of Col. Heck, President. 1 
made no inquiry of Col. Heck as to the terms of the sale or 
the contract with Pruyn. 1 think he told me, however, at 
the time, that the consideration was 5G bonds of the State of 
North Carolina. I do not know when the company pur- 
chased, from whom or for what price. Col. Heck, the Pres- 
ident, had the sole and exclusive mauagemeut of the affairs 
of the Company and of the sale. 

Q. Did you have a meeting of the directors or stockholders 
in relation to the salcjof the Lockville site or the S,000 acres of 
land, previous to said sale, and what was done ( 

A. There was a meetinc; of the directors or stockholder- 
beiore the sale, at which meeting a resolution was pa.— 
giving Col. Heck the absolute control and management ot all 
property of the Company, with authority to sell lands and 
other property ot the Company, and also power to purchase 
lands for the Company. 

Q. Was anything said at that meeting about the sale or 
transfer of Lockville, or the 8,000 acres i 

A. There was nothing said about the sale ot the S,000 acres, 
but I think it was determined to give the State 25 acres at 



1871-'72.] Document No. 11. 100 

Lockville, with water power and privileges, provided the State 
would locate the penitentiary at that point. 

Q. Were you present at any meeting ot the committee to 
locate the penitentiary at Lockville or other points, and did 
you have any communication with any member of said com- 
mittee, or ot the legislature, in reference to said location \ 

A. I was never present at a meeting of the committee at 
Lockville, or any other point, and I do not remember of having 
any conversation with an}' member of the committee on the 
subject, but may have spoken to members of the legislature, 
though only in reference to a proper choice of a site, and not 
in regard to a sale. 

Q. Do you know whether any money or bonds or the pro- 
ceeds of any bonds, were paid to any member ot this com- 
mittee? or did you ever hear any one say that money or other 
thing of value had been paid to any member of the committee 
to influence their choice in the selection of a location for the 
penitentiary ? 

A. I do not know of any money, bonds, proceeds ot bonds, 
or other thing having been paid. I know nothing ot that 
matter except what has been stated in the newspapers. 

Q. Do you know what has become ot the proceeds of the 
sale of the penitentiary bonds by the company ? 

A. I do not. Col. Heck, president, had the entire control 
of the matter. 

Q. Did the Company owe J. G. Williams any money at the 
time the order was given him for the bonds? 

A. I do not know. 

Q. Name the individuals who have an interest in the Deep 
River Manufacturing Company, and their respective interests. 

A. Col. J. M. Heck owns between two and three-eighths, 
G. W. Swepson about the same, and I own about one-fourth. 

Q. Have you had any conversation with Col. Heck since he 
was examined yesterday about the matter of this examination \ 

A. I have not. 

Q. What is the annual salary of the President of the Com- 



110 Document No. 11. [Session 

pany, and has anything been paid him on that, or any other 
account ? 

A. He did receive a salary ot $2,000 ; about that. 

A. ]5. ANDREWS. 

Sworn to and subscribed before the Commission. 

Mr. J. G-. "Williams was sworn, and testified : 

Q. Will you state what number of the bonds called peniten- 
tiary bonds, was received by you, on whose account, and what 
disposition was made of them ? 

A. I received 56 as well as I remember. I received an 
order from Col. Heck, and drew them from the treasurer as 
his agent, and when sold, the proceeds were paid into his 
hands. Col. Heck received the money from me. The amount 
was between $28,000 and $29*000. The accrued interest, of 
between $300 and $400 was paid back to the State Treasurer. 
I received no commission for the sale of the bonds from Col. 
Heck. I bought them from him. 

Q. Did Col. Heck owe you or your bank any money at the 
time he gave you the order on the treasurer for his bonds i 

A. He did not. 

Q. Was this money deposited afterwards in your Bank to 
your knowledge ? 

A. It was not. 

Q. Do you know anything ot your own knowledge, or has 
Col. Heck told you anything, of the disposition of that money i 

A. I do not, and he has not told me. 

Q. State what conversation you had, if any, with Col. Ilcc-k 
about the sale of the 8,000 acres of land to the State bv Pruvn '.' 

A. I had several conversations with him, but cannot recol- 
lect them well enough to repeat them. I had conversations 
with Col. Heck, but they were after the sale to the State. 

Q. Do you know what Pruvn did with his bends '. 

A. No, 1 do not. 

(J. fa the conversation with Seek, alter the eale, did yc 



1871-'72.] Document No. 11. Ill 

understand that Heck, ffcr himself, or for those he represented, 
had sold the 8,000 acres of land to the State ? 

A. I did, and that a deed to the State had g been given. I 
understood this to be the deed for which Heck was to be paid. 

JNO. G. WILLIAMS. 

Sworn to and subscribed before J. G. Martin, Commissioner. 



Raleigh, May 15th, 1871. 

John G. Williams, recalled. 

Q. How long after you received the bonds before you paid 
for them ? 

A. I do not think exceeding ten days. 

Q. Did you pay for them before you had been paid for them I 

A. I did. 

Q. To whom were they sold — what number, and at what 
price ? 

A. They were sold by a house in Baltimore, the whole of 
them, and I think they were sold at about 55 cents. 

Q. Where are these bonds now % 

A. They were brought back b} 7 the parties from Baltimore, 
and the money refunded to them. The bonds are now in my 
possession. 

Q. On whose account are they held now \ 

A. On my own. 

Q. Are they held by you in payment of the money advanced 
on them, or as security i 

A. In payment. 

Q. What is their present value? 

A. 1 do not know. 

Q. Is there any understanding between you and Col. Heck 
or any one else, that you are to be reimbursed for the money 
paid on these bonds, or is the loss to tall exclusively on your- 
self? 



112 Document Xo. 11. [Session 

A There was not, and is not, and ijie loss is to fall exclusive- 
ly on me, but I am of the opinion it I could get a conveyance to 
the land, that would to some extent reimburse me. I had a bill 
prepared for that purpose to be acted upon by the Legislature 
at the session of 186S-'G9, but it was never presented. 

Q. What commission did you pay on the sale of these 
bonds, when thev were sold in Baltimore ? 

A. About one-eighth, which was the usual rate. 

Q. Did you ever inform Colonel Heck that these bonds were 
returned to you ? 

A. I did inform him they were returned. 

Q. What passed in the conversation, it any, that took place 
when you so informed him ? 

A. Xothing special, I think. 

v v >. Did you give Colonel Ileck a receipt for these bonds 
when you got them, and what was the substance of that 
receipt 8 

A. I gave him a receipt, but don't remember the terms. 

Q. Have you had any conversations with Colonel Ileck since 
the first one informing him of the return ot the bonds, and it 
so, give the substance of them? 

A. I have had several. In one of these he suggested the 
bill above referred to. In another he informed me that he had 
paid the taxes on the S,000 acres of land regularly, until last year, 
when I paid it. I think the tax was paid at his suggestion, 
and in his name, but out of my own pocket. The receipt of 
the sheriff was taken in Heck's name, I think. 

Q. In the conversation between you and Colonel Ileck in 
reference to drawing up the bill before mentioned, was it sug- 
gested, that he was to have an interest in the land '. 

A. It was not. 

Q. What was the name of your agent in Baltimore for the 
tale of the bonds I 

A. .T. Gt. McPheetera A; Co. 

( v >. Did you know D. J. Prnyn when he lived in Raleigh, 



1871-72. Document No. 11. 113 

what -was his occupation, and what was believed to be his 
pecuniary condition ? 

A. I knew him. He had no occupation that I knew of. I do 
not know what he was worth. I do not know that lie had any 
property in this city, and was regarded generally as a mere 
adventurer. 

Q. Do you know, upon reflection, what connection he had 
with Colonel Heck, in regard to the sale of the 8000 acres of 
land \ 

A. I do not. 

Q. Did you ever have anything to do with the sale of the 
bonds issued by the State to the Chatham Railroad Company £ 

A, I did not. 

Q. Do you know anything of any money, bonds, proceeds 
of bonds, or anything of value, or have you any information 
of any such things being paid to any member of the com- 
mittee to locate the Penitentiar}" to influence them in the selec_ 
tion of a site, or to any member of the Legislature, or of the 
Convention, to procure, or assist in procuring, the passage of 
any bill or ordinance through either of those bodies? 

A. I know nothing of it, except from rumor. 

Q. Do you know of bonds sold by the Treasurer, known as 
North Carolina Kail road Bonds, and their market value at the 
time? 

A. I heard of the sale to W. II. Jones and Swepson. I do 
not know the market value, but I was told by Rev. Dr. Sinedes, 
that he could buy $5,000 of these bonds, at SO cents, and he 
asked my opinion and advice in the matter, and I advised him 
to buy. This was shortly after the sale to Swepson. 

Q. Did you hear, or have you any information of State 

officials being engaged in bond speculations, in the year 

1868-09-70 i 
A. I did not, and have no information on the subject. 

JOHN G. WILLIAMS. 

Sworn to and subscribed before the Commission. 

8 



114: Document No. 11. [Session 

James Harris, was sworn and testified. 

Q. State what you know as a member ot the committee ap- 
pointed to select a site for the Penitentiary, of all matters con- 
nected with the selection of said site and the purchase thereof. 

A. I was a member of the committee that purchased the site 
at Lockville. I did not go with the committee, being sick at 
the time. I was at two or three ot the meetings of the com- 
mittee for consultation on the subject. Col. Heck was present 
at these meetings, and the negotiations for the purchase were 
with him. lie is the only one I knew in the transaction. I 
understood that the 8,000 acres was adjacent to the Lockville 
property, and was part of that site. I understood, we were to 
pay Col. Heck, $100,000 in State bonds for the property. I 
relied upon representations first made by Col. Heck, and those 
of the committee after visiting the site. I did not understand 
that Pruyn had any thing to do with negotiating the sale. 
When I found that I had been imposed upon, I was very 
anxious to have the whole matter set aside, and a bill for that 
purpose passed the Legislature, in the passage ot which I was 
very active. 

J. U. HARRIS. 

Sworn to and subscribed before J. (i. Martin, Commis- 
sioner. 



Rai.kk.!-, July 1!', 1871. 

Jas. II. Harris, recalled, sworn and testified. 

Q. Do you know of any money, bonds, or the proceeds of 
any bonds or any thing of value being paid or offered to any 
member of the Legislature, or Convention, to procure the pas 
sa f 'C of any bill or ordinance through either of those bodies, or 
to influence their action to procure the passage of any such bill 
or ordinance i 

A. I do not. 



1S71-72.] Document No. 11. 115 

Q. Have you any reliable information, of any such usp of 
money or bonds as embraced in the preceding question, or 
have you any reason to believe that any such transactions took 
place? 

A. 1 believe there were undue influences brought to bear, 
and one reason I think so, was the great amount of treating 
going on, both in the rooms in the capitol, and in the club 
rooms, General Littlefield, as was understood, furnishing the 
suppers. I heard Mr. Stevens, the member from Craven, say 
that he had borrowed $1200, from General Littlefield, and had 
given his note for it, and heard of other members borrowing 
small sums. 

Q. Did you ever borrow money irom either General Little- 
field, or Mr. Swepson, during the session of 186S-'69, or, while 
you were a member of the Legislature or Convention, or any- 
thing of value, by check, or bond, or otherwise? 

A. I have borrowed money frequently from Mr. Swepson, 
but at no time in larger sums than $250, as I believe, and 
always paid up the sum before borrowing again. I don't think 
I have ever borrowed or obtained any money from General 
Littlefield. He frequently endorsed for me in bank, which 
notes I always paid. The highest he ever endorsed for me was 
$400, I think. I never received any thing of value from him. 
I don't think he ever endorsed for me more than four times. 
and the whole amount for which he endorsed would not exceed 
$1,000. I paid all the notes myself. 

Q. Did you not receive in some way from Littlefield or 
Swepson, or from Swepson or Littlefield's order during the 
months of January and February, 1S09, or during the winter 
of '69, a sum exceeding $5,000 ? 

A. No, I did not. In connection with this subject I deem 
it due to make the following explanation : At the convention 
which met in the spring of 1808, for the nomination of candi- 
dates for the State government and for members of Congress 
in this district, I was nominated as candidate for Congress from 
this district. For reasons satisfactory to myself I declined to 



116 Document No. 11. [Session 

accept, which took all persons. Loth colored and white, by sur- 
prise. Col. Deweese "was afterwards nominated in my place. 
Soon after this, Col. Heaton approached me in this city near 
the Yarbrough House, and spoke of my conduct in very high 
terms, and also spoke of my Bervices and labors in behalf of 
the party. He further said that as I had made great sacrifices 
and acted so magnanimously, that they ought to do something to 
compensate me, and.that they ought to make me up a parse, and 
he would see to it that it was done. Nothing mure was done 
in the matter at that time. It drifted on so tor perhaps a year 
and a halt, being occasionally mentioned by myself and friends, 
but nothing being done. It was then suggested to me by some 
persons, whom I do not now recollect, but [think Deweese 
among them, to call upon Mr. Swepson, as he could do mure 
with them than any one, Deweese saying that he would do 
his part. I did then call upon Mr. Swepson, and had conver- 
sations at various times, he saying that it was nothing more 
than right that something should be done, and he would 
see what could be done. At last he told me he 
could do nothing, unless he assumed it himself, and 
told me to come into the bank sometime, when the leaders 
(Littlefield, Heaton, Deweese, and others,) were present, and 
he would see if he could get thorn to do anything. I did call 
afterwards, when Littlefield, Deweese and others were present. 
Swepson then promised to give me $4,000, saying he would 
make these fellows come up, but that he would be responsible 
to me for that sum. He afterwards gave me his note for that 
amount which I kept until last year, and until alter his finan- 
cial embarrasments. Mr. Askew came to me after one of his 
trips to New York, and told me that Mr. Swepson was broke 
and would not be able to pay that note, and he did not think 
I ought to make him pay the whole of it. I then agreed to 
accept one-half in full, being $2,000, which sum Mr. Askew 
paid me. and I gave him up the note. This occurred some 
time in May or June, 1870. I think General Littlefield at one 
time, I think, in 1669, told me that they had arranged tl 



1871-72.] Document No. 11. 117 

matter with Mr. Swepson, and that he would pay me the 
money. 

At the time I was nominated very few persons with whom I 
talked confidentially, had any idea that I would decline the 
nomination, and I had no expectation of receiving anything 
whatever for declining. My reasons for doing so were entirely 
political, arising out of the state of the country, and the un- 
settled questions in relation to the colored race, and their unde- 
termined political status at the time, and the relations of the 
political parties. 

J. H. HARRIS. 

Sworn to and subscribed before the commission. 

Mr. R. "W. Lassiteb, was sworn, and testified. 

Q. State what you know as a member of the committee ap- 
pointed to select a site for the Penitentiary, of all matters con- 
nected with the selection of said site, and the purchase of the 
same ? 

A. I was a member of the committee to select a site for a 
Penitentiary. Some time elapsed before a regular meeting of 
said committee was had. After the lapse of about a month 
the committee met. They organized by the appointment of C. 
L. Harris, Superintendent of Public "Works, as chairman of 
said committee, and it was understood and agreed to by the 
committee, that the chairman should be the medium through 
whom negotiations for the purchase of a site for the location of 
the Penitentiary were to be carried on. His acts were to be 
the subjects of consideration and approval by the committee. 
Applications from various places came in to the committee, to 
visit certain places in the vicinity of Raleigh. After the ex- 
amination of those various places, the committee were request- 
ed to visit Lockville, on Deep River, in Chatham county, 
which they did, and visited a site on the north side of Deep 
River, just below the Lockville dam. After consultation the 
committee ruturned to Raleigh, and continued their delibera- 
tions on the subject of the location of the Penitentiary at that 



118 Document No. 11. [Session 

place. There was, as I understand, a proposition from Colonel 
J. M. Heck to make a present ot a certain spot ot ground at 
that place, with restrictions to which some ot the committee 
objected. Then an application was made to some of the par- 
ties interested in these lands to know what they would let the 
State have the unlimited control in selecting the location for 
the site, and for the control of the water-power, to which ap- 
plication, Ileck replied, that this was a matter oi trade. At a sub- 
sequent meeting, it was stated that the privileges demanded 
could be obtained for $20,000. While this subject was under 
discussion, an application was made by M. S. Littlefield to tell 
to the State a large body of land, said to be lying adjacent to 
Deep River, about eight miles below Lockville, the place where 
the Penitentiary site had been selected, at a price which is not 
now recollected by me. Subsequently in the course of deliber- 
ation about this matter, the lands were to be estimated together 
with the unrestricted privileges in the use of water-power and 
lands, unrestricted as regards the site, and as much land and 
water-power as was necessary for the erection of a Peniten- 
tiary. According to the best of my recollection, the first ap- 
plication came from Littlefield. and then I subsequently learned 
that J. M. Heck and D. J. Pruyn were interested in this 
trade. After some considerable discussion and delay, it was 
concluded by the committee, that if that trade was broken up, 
said committee would not have sufficient time to make another 
selection, and obtain a suitable site for the location of the Peni- 
tentiary before the Legislature should meet. From this con- 
sideration, and from the further consideration that the'lands 
spoken of were represented as lying contiguous to the river, 
had much timber on them, and also granite,quarries and valua- 
ble iron ores, and that the same could be transported by water 
at a very low rate from that point up the river through the 
locks, and down to within the limits ot the Penitentiary, the 
committee thought it proper to give the matter serious consid- 
eration. Whereupon it was determined that a committee 
should he appointed to visit and examine the lands aforesaid, 



1871-'72.] Document No. 11. 119 

and report to the committee the result of his investigation. 
C. L. Harris, chairman of the committee, was designated to 
make such examination and he did go in obedience to his selec- 
tion. The substance of his report together with the represen- 
tation made by other persons, as to the minerals, water-power, 
agricultural lands, and forest timber, induced the committee 
alter some delay, to close the trade. Among those who made 
these representations, was Silas Burns, who lives at Lockville, 
and being a practical machinist, I relied upon his judgment as 
to the quality of the iron ore, which was said to be on said 
land, but about which, the said Burns was mistaken as to loca- 
tion, as he informed me at a subsequent time. There were 
others, not members of the committee, who made favorable re- 
ports as to these things, whose names I cannot recollect with 
sufficient distinction to swear to. I subsequently understood 
that Heck, Hawkins, Andrews and Swepson also were the 
parties interested in this land. 

Q. Was Pruyn known to the committee before the payment 
of the money or bonds ? 

A. I do not remember nor can I now state with distinctness 
whether there was any negotiation with Pruyn, nor did I un- 
derstand that he was interested in said lands until about the 
time the trade was to be closed, when an order was pre- 
sented to be signed tor the transfer of a part of these bonds to 
him. After it was agreed the trade should be closed, I left the 
city of Raleigh, requesting the chairman of the committee to 
obtain the services of able counsel and prepare the title deeds, 
and was surprised to learn, at a subsequent time, that only an 
obligation to make title had been entered into, instead of a 
deed with warranty and full covenants, as I had requested the 
chairman of the committee to obtain. When I found that 
such a deed as I had expected had not been made, but an obli- 
gation to make title only, I remarked to Mr. Kemp P. Battle, 
who prepared the obligation, in 'the presence of R. S. Tucker, 
that I could not defend such a trade. 



120 Document No. 11. [Session 

Raleigh, Friday, May 12th, 1S71. 

Examination of R. "W". Lassitek, resumed : 

Q. "With whom was the .negotiation chiefly made for the 
purchase uf the 6,000 acres of land i 

A. I think lleek, Littlefield and Pruyn were the parties 
with whom we held consultation in reference to this bargain, 
aud to the best of my recollection Col. J. M. Heck was con- 
sidered and treated as the controlling man. Col. J. aL Heck 
attended the committee from Raleigh to Lockville, at which 
place we spent the night, and on the next day examined the 
site and water-power. (Leaving the site, at Lockville, the com- 
mittee went to Haywood, where I had a private interview 
with Mr. Silas Burns.) 

Q. Did the committee have any negotiation with Col. Heck 
as to the purchase of the 8,000 acres of land ? 

A. I can't remember what took place between Col. Heck 
aud the committee in reference to the 8,000 acres of land. 
"What took place between the chairman of the committee or 
other members and Col. Heck, I know not. ~My impression 
is, that if Pruyn, or whoever else it Mas that made the nego- 
tiations, he did it in conjunction with Littlefield and these 
other parties. 

Q. "Where did Pruyn live at the time ol these negotiations, 
and what was his occupation? 

A. He then boarded at the Exchange Hotel, in the city of 
Raleigh, and was employed in getting wood, supplying the 
people of Raleigh with it, and sometimes performed carpen- 
ters work. 

Q. Do you know where he now lives, and when he left the 
State ot North Carolina? 

A. I do not know where the residence ol said Pruyn is. I 
8aw him in "Washington City about the first of March last, which 
place he lelt, and it was said, went to New York. He left the 
State of North Carolina, some eighteen months, or two years 
ago, to the best of my recollection. 



1871-72.] Document No. 11. 121 

Q. Do ) T ou know what became of the bonds, or any portion 
of them, which were paid by the State to D. J. Pruyn? 

A. I have no knowledge of what became of said bonds, or 
any part thereof. I never saw said bonds. 

Q. Did you ever hear Pruyn, or any one else say what he 
did with these bonds ? 

A. I do not remember to have heard Prirjn say that he had 
made any disposition of said bonds, but spoke of them as being 
in his possession. I heard a rumor that Deweese had offered 
the bonds for sale and had partly sold them, or made a trade to 
sell them, and that the party, finding out that the bonds were 
worthless, refused to close the trade, and I heard that similar 
efforts had been made b} 7 Deweese to sell with similar results. 
Mr. D. J. Cavarly remarked to me, some months ago, that 
those bonds were held by a broker in Washington City. I 
know nothing of the truth of these rumors about Deweese. 

Q. Do you know what became of the fifty-six bonds that 
were paid to Ileck & Co., or have you any knowledge on the 
subject 2 

A. I have no knowledge of what became of those bonds, 
neither have I any information. It was a rumor that they 
were disposed of to Mr. J. G. Williams. 

Q. Do you know whether or not any of these bonds, or the 
proceeds of them, were given to any member of the committee, 
to influence him in the purchase of these Penitentiary lands? 

A. I know of no bonds, or money, or other things given to 
the committee for any purpose whatsoever. 

Q. Did you ever hear Heck, or Littlefield, or Pruyn, or any 
one else say that the committee, or any member cf it, had receiv- 
ed, or were to receive any consideration, to influence their action 
in the location of the Penitentiary? 

A. I never heard Heck, Littlefield or Pruyn, say that any 
member of the committee had received, or were to receive 
money, or bonds, or anything else, as a consideration for loca- 
ting the Penitentiary, or the purchase of the lands as aforesaid. 
But I have heard the trade denounced as a swindle upon the 



122 Documbnt No. 11. [Session 

State through the newspapers. 1 do not remember the lan- 
guage used by oilier persons who spoke of this trade, but in 
public discussion, and in private conversation, I have heard it 
disapproved of. 

Q. Did you ever hear of any offer being made of money 
bonds, or other tilings of value, to any member of this commit- 
tee to influence their action in the selection of a site for the 
penitentiary '. 

A. I did not, and have not to my recollection. 

Q. Do you know at whose instance and in what manner the 
committee known as the Penitentiary Committee were appoin- 
ted I 

A. They were appointed by the President of the Senate and 
Speaker of the House. 

Q. Do you know whether Col. Heck was active in sugges- 
ting the selection of any particular individual on that commit- 
tee ? 

A. I do not. 

Q. Do you know whether any other person outside of the 
Legislature suggested the name of any member of the com- 
mittee ? 

A. I do not. 

Q. Do you know whether any of the officials of the State 
suggested the name or procured the appointment of any mem- 
ber of that committee ( 

A. I do not. 

Q. Do you know whether any member of the Legislature 
suggested the name or procured the appointment of any mem- 
ber of that committee ? 

A. I do not. 

Q. Do you know, or have you heard, of any members of the 
committee receiving or having any State bonds or other thing ot 
value alleged or charged to have been received for any services 
on the committee \ 

A. I do not and have not heard. 

Q. "Were you a member of the Legislature of 186S-'69 ? 



1871-'72.] • Document No. 11. 123 

A. I was a Senator from the district of Granville and Per- 
son. 

Q. Do yon know of ai^ bonds, proceeds of any bonds, 
money or other thing of value being paid to any member of 
the Legislature to procure the passage of any bill through the 
Legislature or either branch of it ? 

A. I have no knowledge of any such money, bonds or other 
things being paid to any members of the Legislature in either 
branch thereof to procure the passage of any bill or bills. 

Q. Do you know of any member of the Constitutional Con- 
vention having received any bonds, or the proceeds thereof, or 
money, or anything of value to procure the passage of any ordi- 
nance through that body ? 

A. Of my own knowledge I do not. 

Q. Llave you any reliable information upon the subjects em- 
braced in the two previous questions, or either of them ? 

A. I have information which I regard as reliable that 
in one case, which I now recollect distinctly, the Rev. J. 
Brinton Smith, of this city, told me that a member of 
the convention by the name of Mann had come into the 
the possession of a considerable amount of means, either in 
money or bonds, and his impression was that he could not 
have received the same in any other way than in considera- 
tion for his vote or influence in the Convention in assisting in, 
or procuring the passage of, some measure. I do not remem- 
ber the precise number of bonds. In that interview with 
Mr. Smith, or on some other occasion about the same time, 
he alluded to a member of the Legislature, and I think of 
the Senate, who had made an eloquent speech favoring some 
measure, and before he had taken his seat a parcel of money 
was placed in hands. After some hesitation he disclosed the 
name, in confidence of Judge Osborne, Senator from Mecklen- 
nurg. The disclosure was so important that it induced me to 
seek another interview with Dr. Smith upon that subject, 
when he informed me that 1 had misunderstood him as to the 
force of his former declarations, and qualified his language by 



124 DoiTMENT No. 11. [Session 

saying he had no knoweldge of the subject except as he had 
heard it from sonre one else. I never mentioned this matter 
to Judge Osborne, for the reason that I knew it would be 
deeply mortifying to him, and the qualified statement of Dr. 
Smith had relieved me from what I should otherwise have 
supposed to be my duty, that is, to mention the matter to 
Judge Osborne. And I will further say, in justice to the 
memory of Judge Osborne, that I had no personal knowledge 
of his receiving any money. Nor did I then, nor do I now 
believe, that as a member of the Senate, he had received any 
money corruptly. I have also heard it said that Gen. Byron 
Laflin had a number of State bonds, but how he came in pos- 
session of them, whether wrongfully or not, I cannot tell nor 
do I know nor now recollect from whom I had the informa- 
tion. My impression is that Laflin told me himself that he 
then had, or had had, a number of State bonds. Laflin is not 
now a resident of North Carolina, but is, as I understand, a 
citizen of New York, having been gone about twelve months. 

Q. Have you any farther information about any other mem- 
ber of the Legislature or Convention in regard to the matters 
embraced in the foregoing questions. ? 

A. None that I can recollect of at this time. 

Q. Do you know anything about an entertainment given 
by Milton S. Littlefield or any one else, to procure, as was 
alleged, the repeal of the resolution appointing what was 
known as the Bragg Committee? 

A. Sometime during the winter of 1870, about the month 
of February, I was invited by 0. S. Hayes, Senator from Bob- 
eson, to an oyster supper to be given on that evening at the 
National Hotel, not knowing by whom the supper -was given 
or for what purpose. Upon my arrival at the hotel I found a 
considerable number of persons in the room where the supper 
was given, consisting chiefly of members of the Legislature, 
other persons, however, being present. 

Q. Were any officers of the State government present, and 
if so, name them '. 



1871-'72.] Document No. 11. 125 

A. I cannot say whether any of them were present or not. 

Q. Was M. S. Littlefield or Geo. TV. Swepson there ? 

A. Littlefield was. I do not think Swepson was. 

Q. "Will you state, in a summary and general way, what was 
done at that entertainment ? 

A. The refreshments were composed of cigars, oysters and 
wine. After the oyster supper was over, there was general 
conversation, and speeches made by Brogden, Burns, Littlefield 
and others. Before the close of the supper I was called on to 
make a speech and did so. The speeches were party speeches, 
and the subject of the Bragg committee was alluded to, and 
the manner of its appointment, to-wit : the President going 
out of the Senate to select it, was disapproved of, and it was 
alleged in some of the speeches, perhaps all, that the commit- 
tee had been raised to prosecute inquiries and make investiga- 
tions to furnish capital for the approaching campaign in the 
summer, and the like reasons. Late in the evening I was called 
upon to make a speech, in which I declined to have anything 
to say about the repeal of this bill. 

Q. Was it not agreed at that meeting that a motion should 
be made in the Senate, the next morning, to repeal the reso- 
lution appointing the Bragg committee % 

A. Some one during that evening appealed to me to go for 
the repeal of the resolution which, I declined to do. Accord- 
ing to the best of my recollection, it seemed to be the imder- 
standing that the resolution raising the Bragg Committee, 
should be repealed, but whether there was a formal vote 
taken, I do not now know. 

Q. Was there a motion made in the Senate on the next day, 
or afterwards, to repeal said resolution ? 

A. I think there was a resolution introduced the next day 
to repeal the resolution appointing the Bragg Committee. I 
cannot say, without reference to the- journals, who introduced 
the resolution or advocated its passage, as I was not present at 
the time. 

Q. Do you know, or do you not know, whether any bonds, 



126 Document No. 11. [Session 

money, or other things were given or offered to any member 
ot the legislature, or to any ot the persons who were present 
at that entertainment, to procure a repeal, or assist in procuring 
the repeal of the resolution appointing the Bragg Committee ' 

A. I do not. I heard nothing and saw nothing that induced 
me to believe that money, bonds or other things were to be 
given to any person then and there present to influence them 
to vote for the repeal ot said resolution. 

C v ». Was it not charged in the Senate on the next day by 
Welker and others that gold, bonds or money, or some other 
consideration Mas offered to members of the Senate to procure 
the passage of the resolution repealing the Bragg Committee '. 

A. I do not know what the tenor ot "Welker's speech was. 
I heard that he used strong language in opposing the repeal, 
and also that the senator from Rockingham, Mr. Lindsay, 
stated that he had heard that gold or something had been used 
or offered to procure votes enough to carry the repeal. Of 
this I know nothing, except as I heard it repeated. 

Q. Have you any reliable information upon that subject '. If 
so, state it fully. 

A. 1 have no reliable information as to the giving or offering 
ot gold or anything else on that night, or at any other time, to 
procure the passage of that resolution until after the debate in 
the Senate next day, the substance of which I have stated in 
the above answer. 

Q. Can you give any other information relative to the 
subjects of inquiry before the Commission '. 

A. I do not now recollect any other subjects about which I 
could testify before the Commission. Some time has elapsed, 
and many things have been said and published which may 
have escaped my memory, which I cannot now recall. 



1871-'72.] Document No. 11. 12T 

Kaleigh, May 13, 1871. 

Examination of R. W. Lassiter continued : 

Q. Do yon know whether Littlefield, or any other person, 
made any presents to members of the Legislature or of the 
Penitentiary Committee I If so, state at what time and under 
what circumstances these presents were made ? 

A. I know of no presents of any sort made by Littlefield or 
other persons to the Penitentiary Committee, at any time, that 
I now remember. As to the members of the Legislature, I 
have no distinct recollection. I heard from some oue, I can't 
how recollect whom, that John W. England and some one else 
thought a great deal of Gen. Littlefield, for that Littlefield had 
flattered them by making them a present of a necktie, or some 
trifling article. I further heard that Capt. D. J. Rich, Senator 
from Pitt, had in his possession a number of State bonds. It 
was a rumor that Littlefield was a man of large means and 
liberal in the use of them, and that he sometimes made presents, 
to whom and of what value, I do not now know, and cannot 
recollect. 

Q. Did not Littlefield keep a drinking establisment or some- 
thing of the kind in or about the capitol or elsewhere, during 
the session of the Legislature, at which members were freely 
treated ? 

A. There was, in the early part of the session of 1808, or 
during the extra session in '68, kept in the room of the capitol 
on the west portico, liquors and cigars free of charge to any- 
body who came, or were invited to it. P>y whom the said 
liquors were furnished, I did not know. Subsequently I 
learned that a Mr. Baekalan or Thiem, or both, had a large bill 
against Gen. Littlefield amounting to some $3,000, or. there- 
abouts, for liquors furnished. At the time I did not know to 
whom the liquor belonged, or at whose instance they were 
brought here. But the supply was more profuse than 1 had 
been accustomed to see in the capitol during any session of the 
General Assembly, previous or subsequent to that time, for 



128 Document No. 11. [Session 

the reason that on other occasions the supply was not usually 
larger than a Lottie or two, and that used socially among the 
members, without reference to party or the influencing of 
votes. 

Q. Do you know, or have you any information that the offi- 
cials of the State or members of the Legislature were engaged in 
speculating in State bonds during the years 1SGS or '09, or'7<> '. 

A. I have no knowledge of any State official or member of 
the legislature engaging in speculation in State bonds. I have 
no information on the subject except that I heard that some of 
the President's of the various Railroads we.e speculating in 
special tax bonds in New York in the summer of lSGS-'OO. ' 

Q. Did you not sell a tract of land in the county of Granville 
to Milton S. Littlefiekl ? If so, state when and at what price. 

A. Yes, I did. Sometime in the summer of 1S68 I offered 
for sale a certain parcel of land lying about ten miles from the 
town of Oxford containing as near as I can recollect, about one 
hundred and sixty-five acres. Not long thereafter, I sold the 
said tract of land to Milton S. Littlefield for the sum of $3,000, 
making $18.75 per acre. In the spring or winter of that year 
I was about to close a trade with Tiobt. L. Royster for the 
same land at $2,600. The trade was broken off for the reason 
that he wanted some additions made to the land from a part of 
another tract, which I declined to make. After the meeting 
of the General Assembly I had a bill before the Legislature 
for a railroad running, as I contemplated, through or near this 
land, and in a short distance thereof, according to my calcula- 
tions, there would be a depot. I do not think the bill Jiad 
passed at the time I sold the land, but it was pending, or it 
was understood that it would pass, and I had reasonable assu- 
rances, that it would pass. Being anxious to encourage immi- 
gration, and to sell the remnant of mv estate to the best advan- 
tage to pay my debts, this land was offered for sale, when I met 
up with Milton S. Littlefield, who informed me that lie had a 
brother-in-law by the name of .lohn B. Clark, of the State of 
New York, who desired to come South and purchase land ; 



1871-'72.] Document No. 11. 129 

whereupon the proposition to sell was made with reference to 
the location and quality of the land. Alter a short time Little- 
field told me he was satisfied with what he had learned about 
the land, and its supposed contiguity to the railroad, and that 
I might prepare a deed and he would hand me the money; 
whereupon I did prepare a deed, and handed it to him, and 
told him to examine it and satisfy himself that it was all right. 
Very soon thereafter I applied to him, and he said he would 
hand me the money, when I assured him the deed should be 
made perfect and the blanks filled up. I mentioned to him 
frequently that I wanted the money to pay for that land, when 
his reply was that he was busy then, but any time he could fix 
it. This thing was carried on, as well as I recollect, for some 
weeks. Becoming uneasy, I communicated the circumstances 
to some of my friends, among whom was General Willie D. 
Jones, with whom I had several conversations on the subject; 
until the day, or about the day of the adjournment ot the 
session of the Legislature of 186S I ealled on Gen. Jones and 
told him I wished him to go with me to make a demand for 
my deed or the money ; whereupon Littlefield gave me a 
check for $3,000, which I had cashed at J. G. "Williams & 
Co's bank. 

Q. Did Littlefield ever visit and examine that land ? 

A. He did not visit or examine it to my knowledge. 

Q. Did John B. Clark ever move to the land ? 

A. He did not and has never seen it. 

Q. Was this money paid to you by Littlefield for the land 
before the location of the Penitentiary 6ite ? 

A. It was paid before. 

Q. When did you receive your appointments as a member 
of the Penitentiary committee ? 

A. August 21, 1868, as appears by the journals of the Senate 
for the special session of 1808. Before this date, some weeks, 
the bargain and sale of said land was made to Littlefield, and 
before I was appointed on the committee to locate a Peniten- 
tiary, or had any knowledge that I should be appointed a raem- 

9 



130 Document No. 11. [Session 

ber of said committee, and I furthermore state that from the 
special session commenced in 1868 and ending in the spring of 
1870, no consideration by gifts, money, goods, bonds or any- 
thing else was ever received by me as a consideration for ray 
vote upon an}' subject whatever, connected with the passage of 
railroad bilk, the location of the Penitentiary or anything else. 

Q. Can you give the exact date of the deed ( 

A. I cannot now, but can do so hereafter it the commission 
desire it. (Date of sale afterwards given, Sept. 1, 1SGS.) 

Q. State what was the character of the land and its value 
independent of the influence upon it of the prospective rail- 
road ! 

A. The character of the soil is thin for agricultural purposes, 
the land is finely adapted to the growth of the best quality of 
tobacco. I should not have been willing to take less than 
litteen dollars an acre for it, although the valuation of the land 
by the assessors is considerably less than that. 

Q. Do you know anything of a contract made to D. J. 
Pruyn for building a stockade for the Penitentiary at Lock- 
ville, dated Nov. 14th, 1SG8 ? 

A. I know nothing more than what appears upon the paper 
to which my name is attached. The contract having been 
made when I was absent, and upon my return, being assured 
that it was all right and I suppose having heard the paper 
read, 1 signed it with the other members of the committee. 

Q. Do you know who was interested, if any body, with 
Pruyn in that contract? 

A. I do not know of any one interested with him. 

Q. Can you tell why it was the contract was made with 
Pruyn to build the stockade at Lockvillc before the State 
received a deed for the property, which deed appears to be 
dated the 3d of December, 1868 ? 

A. 1 cannot. I am sure I must have been satisfied that 
the papers were all properly drawn and executed when I put 
my name to the contract for the stockade. 



1871-72.] Document No. 11. 131 

Q. Do you know why a deed for the 8,000 acres of land 
was not taken directly from the Deep Paver Manufacturing- 
Company instead of from Pruyn ? 

A. I do not. 

It. W. LASSITEP. 

Mr. J. D. Cavaely was sworn and testified : 

Q. Do you know what disposition Pruyn, Heck, or any 
others of these men made of the Penitentiary bonds? 

A. Not directly. I don't think I ever heard Pruyn speak 
of them, though I may have done so. I heard a banker by 

name of — , in the city of "Washington, say that he had 

purchased all Pruyn's portion of the Penitentiary bonds at, I 
think, about 60 cents, and he was much disturbed about their 
goodness and value, and asked me what they were worth, and 
I told him that they were valueless, I thought. I know 
nothing farther about these bonds. 

Q. Do you know anything about any other bonds ? 

A. Nothing of any others except what I bought myself, 
which I did on two occasions, at auction in the city of New 
York. At one time $60,000 and the other time $100,000 or 
more. I bought the $60,000 at 60 cents I think, and sold at 
79. I do not remember what I gave for the $100,000 or 
more, but I sold them at a loss. 

Q. "Were you a resident of the city of Raleigh in the winter 
of 1S68-69, and during the session of the Legislature? 

A. I came here in the summer of 1867 or 1868 and have 
been here generally ever since, and was here during that 
session of the Legislature. 

Q. Do you know, or have yoii information, that bonds, 
proceeds of bonds, money or other things of value, were paid 
or given to any member of the Constitutional Convention 
or Legislature, to procure, or assist, in procuring the passage 
of any ordinance or bill through either of those bodies ? 
A. No ; nothing, except from rumor. 
Q. Did Littlefied or Swepson. or any one else, ever tell you 



132 Document No. 11. [Session 

that they had paid anything to procure the passage of Railroad 
bills through the Legislature. 

A. Neither ot them. 

Q. Do you not know that Gen. Littlefield was very active 
in procuring appropriations to Railroads during the session of 
lS68-'79? 

A. I do know that he was very active and that he had the 
use of the room on the west portico of the capitol where liquor 
and cigars were kept, as I think, from the numher of bottles in 
the room. 

Q. Do you know anything of other matters embraced in the 
subjects of this investigation 3 

A. I remember that Geo. TV. Swepson once proposed to me 
to become the President of the Western N. C. R. R. and hold 
it about six months and then go into bankruptcy, which I 
refused to do. 

J. D. CAVARLY. 

Sworn to and subscribed before the Commission. 



Raleigh, May 15, 1871. 

Cebukn L. Harris was called, sworn and testified. 

Q. Are you Superintendent of Public Works, and were yon 
bo at the time the location of a 6ite for the Penitentiary was 
decided ? 

A. I was at that time. I was chairman of the board of the 
Penitentiary Committee. 

Q. Did yon take an active part in the selection of said site? 

A. I did. 

Q. Will you state with what parties you negotiated the pur- 
chase ot the 8,000 acres of land which was conveyed to the 

State? 

A. With Col. J. M. TIcck and D. J. Pruvn. 



1871-'72.] Document No. 11. 133 

Q. Did you visit and examine the 8,000 acres of land ? 

A. I did examine it, especially with reference to the iron 
ore. I spent only one day in the examination. Heck and 
Pruyn were in company with me. 

Q. "Who were the owners of that land ? 

A. The Deep River Manufacturing Company was said to be 
the owner, and Pruyn represented himself tome as one ot the 
company. 

Q. Did Milton S. Littlefield or Swepson have anything to 
do with this trade ? 

A. Swepson did not, that I know of, but Littlefield proposed 
at one time to sell the 8,000 acres of land, or some portion of 
it. He proposed to sell it at $19.50. When he made this 
proposition, Downing and I both told him we would not con- 
eider it at this price. I had no further negotiation with him. 

Q. "Who made the next proposition to sell ? 

A. I think the next proposition to sell the said land came 
from Pruyn. He offered it at $12.50 per acre. "We refused 
to give that, and offered $12.00. Some days after, we agreed 
to give $12.50 per acre. 

Q. Do you know who had the title to this 8,000 acres ot 
land when the proposition to sell was made ? 

A. I do not. I supposed it was in the Deep River Manu- 
facturing Company when the offer was made and accepted. I 
supposed that Littlefield, Pruyn and Heck, from the w r ay they 
talked, all represented the company. I did not examine any 
title deeds to the lands at any time. 

Q. Can you tell why the deed for the 8,000 acres of land 
was made by Pruyn alone ? 

A. I cannot. 

Q. "What was Pruyn's position and reputation in the city at 
that time ? 

A. lie represented to me at some time that he had from $16,- 
000 to $20,000 on deposit in bank. lie was a kind of spec- 
ulator, and owned, so far as I know, one small house and lot in 



134 Document No. 11. [Session 

the city, which lie afterwards sold to Col. Shaffer for about 
$2,000* 

Q. "Was there anything said in your negotiations about war- 
ranting the title to the land ? 

A. Something was said about a chain of title, audit was repre- 
sented that a warrantee deed was all that was needed. 1 was 
ashed to have the deed drawn, but I declined and the commit- 
tee referred that business to the Attorney General, Coleman. 

Q. Why were the orders on the Treasury divided, giving 
fifty-six bonds to Heck, and forty-four to Pruyn ? 

A. I do not know why, except that Heck and Pruyn asked 
it to be done in that way. I thought I was buying from the 
Deep River Manufacturing Company, of which I understood 
from the parties that Pruyn was a member, at least that "was 
the impression made on my mind. 

Q. Do you know who drew the deed from Pruyn to the 
State for the 8,000 acres of land, and did you employ any 
counsel to examine the title ? 

A. Coleman was to do it according to my understanding, 
and I employed no counsel. I don't know who drew the 
deeds. 

Q. Do you know anything about the contract for the 
stockade, and who was interested in it ? 

A. I entered into a contract for its construction with Pruvn. 
by direction of the board, and took a bond from him, with <i. 
W. Swepson and Deweese as security. I supposed Pruyn was 
the only party interested in it. 

Q. "What was the consideration of the deed for the 25 acres 
Lockville property and water privileges? 

A. It appears from the deed itself that the consideration 
was nominal, but that was not my understanding. Col. Heck 
offered to give 15 acres, but I told him that was not enough. 
"We must have 25 acres or none. Hock said that would be a 
matter of business, and if we got that much we would have to 
pay for it. The 25 acres and the water privileges were esti- 



1871-'72.] Document No. 11. 135 

mated at $20,000, and when the trade was made for the 8,000 
acres, this $20,000 was embraced in it. 

Q. What was the object of buying 8,000 acres of land in 
connection with the penitentiary at a distance of eight miles 
from the site ? 

A. For the purpose of getting timber for charcoal and for 
lumber, iron, stone and other things necessary for building 
and manufacturing, with the convenience of the river for trans- 
portation, that being thought cheaper than horse power. I 
understood there was a quarry ot granite immediately on the 
river, and it was represented that there was an abundance of 
superior ore, specially adapted to the manufacture of car wheels 
and similar articles, and it was likewise represented that the 
land lay in one compact body, contiguous to the river up and 
down for some distance. The quarry pointed out to me at 
that time was represented to be on that land. 

Q. "Who made these representations to you as to the char- 
acter of the land with reference to minerals, quarries and 
other things ? 

A. I think they were made by Pruyn and Heck, who both 
were with me. I do not recollect what particular part each 
bore in their representations. There were others present, men 
from the neighborhood. I have heretofore given full testi- 
mony before a special committee of the legislature, on these 
points, and all matters connected with the location of the 
penitentiary. 

Q. Do you know what has become of any of these peniten- 
tiary bonds delivered to Heck and Pruyn ? 

A. I do not, and I have no information on the subject. 

Q. Do you know of any money or bonds or proceeds thereof, 
or anything of value given or offered to any member of the 
committee to secure their influence in fixing the location of the 
penitentiary, or to any member of the legislature or convention 
to procure, or assist in procuring the passage of any bill or 
ordinance through either of those bodies, or have you any in- 
formation on this subject ? 



130 Document No. 11. [Session 

A. I do not, and have no information, except through the 
newspapers. 

Q. Do yon know of Swepson or Littlefield or Heck, or any 
of these men, purchasing anything from any member of the 
Legislature? 

A. I do not, except in newspaper reports. 

Q. Have you any information of any officials of the State 
using any of the public money, bonds, proceeds of bonds, &c., 
for the purpose of influencing members of the Legislature, or 
convention, or for any other purpose ? 

A. No, none, except what I heard in the newspapers. 

Q. Do you know anything of their speculating in bunds or 
other securities ? 

A. I do not. 

Q. Did you ever see any of the special tax or other State 
bonds in the possession of any member of the Legislature or 
convention, or any State officials, or did you ever hear any 
of them say they had such bonds in their possession ? 

A. I never saw any, and never heard them say they had. 

C. L. HARRIS. 

Sworn to and subscribed before the Commission. 



Raleigii, May 11th, 1S71. 

K. P. Battle, was called, sworn and testified. 
Q. Do you know anything of the sale by the Deep River Man- 
ufacturing Company and the purchase by the State, of the 
property known as Lockville, for a site for the Penitentiary | 
And do you know anything of the purchase and sale of a cer- 
tain tract or tracts of land, said to contain 8000 acres, for the 
use of the Penitentiary? If you have any knowledge or in- 
formation upon this matter, you will please state it fully. 

A. At the request of J. M. Heck, President of the Deep 
River Manufacturing Company, I drew the deed for the tract 



1871-'72.] Document No. 11. 137 

of land and the water-power at Lockville, and I understood 
it to be a gift from the Deep River Manufacturing Company. 
The terms and stipulations were agreed to by Messrs. Heck 
and Pruyn, in my office. I did not annex a warrantee because 
it was a donation, as I understood it, on the conditions men- 
tioned in the deed. I considered the title perfect. I also in 
pursuance of the instructions of Colonel Heck, drew the deed 
for the several tracts of land making up the S000 acres men- 
tioned in the deed of Pruyn to the State. The deed was 
made by Heck to Pruyn in fee simple. The condition, I 
think, was $5G,000 in State bonds. I think Colonel Heck 
had title in fee either in his own right, or as President, to one 
of the smaller tracts mentioned. Possibly, he had to the 
other smaller tracts. At any rate, for all the lands conveyed. 
I think he had the power of attorney from a Dr. McKay, irre- 
vocable for a limited time, authorizing him to sell in fee, an 
arrangement very common with persons selling lands as the 
agents of others, when the agents are by contract bound to 
account to the principals for the sum agreed on, and retain 
all they can get over that sum. The two smaller tracts were 
said to be of considerable value ; the larger tract was what is 
called "piney woods." I have no doubt that Pruyn's title un- 
der that deed was perfect; there was a covenant of general 
warranty. Messrs. Heck and Pruyn with a Mr. Ballard, who 
was brought apparently as a witness, came to my office for 
the purpose of having the deeds drawn. None of the Peni- 
tentiary committee were present, and I never consulted with 
any of them. Pruyn wished to leave town that night, and I 
was compelled to draw the deeds without further examination 
than was afforded by the papers submitted to meat that time. 
Mr. Pruyn stated he wished to show them to Mr. Merrimon, 
as his attorney. 

Q. Do you know what the understanding was between Heck 
and Pruyn with regard to this sale ? Did you hear either of 
them say, or have you any information on that subject ? 



138 Document No. 11. [Session- 

A. I am of the impression, the understanding was that 
Pruyn was to make the title to the State. 

Q. Do you know whether the contract was made with Heck 
by the committee, and why it was that the deed was not made 
directly by him (Ileck) to the State? 

A. I do not know of any contract by Heck and the commit- 
tee, and I do not know why the deed was not made directly by 
him to the State. I understood that Heck's contract was 
with Pruyn, and drew the papers accordingly. 

Q. "What was your impression of Pruyn's character and 
solvency I 

A. He was a carpet-bagger. If he had any property at the 
time I did not know it. He had property afterwards, and 
either went or was thrown into bankruptcy. This was a year or 
two afterwards. 

Q. Do you know anything of these bonds that were paid to 
Heck and Pruyn, or what became of them ? 

A. I learn that Heck's bonds were sold to John G. "Wil- 
liams. I know nothing of Prnyn's bonds. In these matters I 
acted entirely as attorney and had no interest otherwise in any 
shape or form with the affairs of the Deep River Manufactur- 
ing Company. 

Q. Do you know who were the stockholders in the Dee]' 
River Manufacturing Company ? 

A. I remember the names of Andrews, Ileck and Swepson. 
I cannot say that I know all. 

Q. Have you any information or knowledge that any of the 
State officers had received any money or bonds or proceeds 
thereof to influence their official action in any way? 

A. r have no information on the subject. 

Q. Do you know of any bonds, proceeds oi any bonds, 
money, or anything of value having been paid or offered to 
any.member of the committee to locate the penitentiary, to 
influence them in the selection of a site for the penitentiary; 
or of having been used directly or indirectly to promote that 
object, or have you any information on the subject? 



1871-'72.] Document No. 11. 139 

A. I have no knowledge on the subject, nor have I any 
information on the subject. 

Q. Do you "knew of any bonds, proceeds of bonds, money, 
or anything of value being paid or offered to any member of 
the Legislature or Convention, or having been used directly 
or indirectly to procure, or assist in procuring, the passage of 
any bill or ordinance through either of those bodies, or have 
you any information on the subject? 

A. I have no personal knowledge connected with the sub- 
ject. I know nothing except what was communicated under 
the seal of professional confidence. This commuication took 
place after the passage of the bills. 



Raletgh. May 20th. 

Mr. K. P. Battle re-called. 

Q. State the names of the client or clients by whom these 
communications were made to you as their attorney? 

In regard to this question Mr. Battle desired time to con- 
sult with counsel as to the right of the commission to ask 
this question, and also as to his duty towards his clients in 
regard to such questions, which request was allowed by the 
commission. 



September 10th, 1871. 

Mr. Battle having been re-called, states that learning that 
Gen. Lewis had been examined by this committee, and that 
Dr. Hawkins was examined by the former committee, he 
waives the legal question and gives the names of the gentle- 
men as the parties embraced in the question as his clients. I 
have no further information on the subject whatever. "What 



14:0 Document No. 11. [Session 

I heard from these gentlemen, I heard Rome time alter the 
passage of the bills to which these questions relate. 

KEMP P. BATTLE. 
Sworn to and subscribed before the commission. 

Mr. D. W. Bain was called, sworn and testified : 

Q. What was the date of the delivery of the 56 State bonds 
to Col. J. M. Heck, and also of the 44 bonds to D. J. Fruyn i 

A. The 5G delivered to J. M. Heck was on the 28th of No- 
vember, 1868, and accrued interest ($382.65) charged to Nov. 
11th, from the date of the bonds, October 1st, 1868. The 44 
bonds to D. J. Pruyn were delivered November the 30th, 1S6S, 
Accrued interest ($374.00) was charged on these bonds from 
October 1st, 1868, to November 21st, 1868, (Page 28, Treas- 
urer's Report, Doc. No. 3, Legislative Documents 1869-70.) 
The interest, was charged to the date of the issue of the cer- 
tificates of the bonds, they not having been yet received from 
the hands of the engraver. I am chief clerk in the Treasury 
Department of North Carolina. 

D. W. BAIN. 

Sworn to and subscribed before the commission. 



Raleigh, May 17th, 1871. 

Hon. A. S. Mekhimon, was called, sworn and testified : 
Q. Do you know anything of the sale by the Deep River 
Manufacturing Company and the purchase by the State of.the 
property known as Lockville as a site for the Penitentiary ( 
And do you know anything of the purchase and sale of a cer- 
tain tract or tracts of land said to contain S,000 acres of land 
fur the use of the Penitentiary ? If you have any knowledge 
of, or information on the subject, please state it fully ? 

A. The only information I have on the subject is, that about 
the time stated in the papers that I drew, which are now in 



1871-'72. Document No. 11. 141 

the possession of the committee, D. J. Prnyn employed me to 
draw such papers, a contract for the construction of a stockade 
near Lockville, and a bond in connection with the same. I 
also drew the deed executed by D. J. Prnyn to the State for 
about 8,000 acres of land. I know nothing of the terms of the 
purchase or sale, or of the letting of the contract for building 
the stockade other than what appears in the papers drawn by 
me. I have no other information on which to found belief 
about the same. 

Q. Do you know of any bonds, or proceeds of any bonds or 
money, or anything of value being paid or offered to any mem- 
ber of the committee to locate the penitentiary to influence 
him in the selection of a site, or to any member of the Legis- 
lature or Convention, to procure or assist in procuring the 
passage of any bill or ordinance through either of those bodies, 
or have 3*011 any information on the subject ? 

A. I answer each question in the negative as to my own 
knowledge. I heard Mr. Geo. "W. Swepson say, in a general 
and casual conversation, perhaps more than once, that officials 
connected with the several Railroad companies for whose bene- 
fit Legislative appropriations had been made since the adoption 
of the present State Constitution, had paid money to lobbyists 
to procure the passage of the act making such appropriations. 
I did not hear him state his grounds of information. I have 
no further information other than that derived from common 
rumor, and the newspaper publications of the day, that wonld 
warrant me in forming a belief touching the matters embraced 
in the questions propounded to me. 

Q. Do yon know of G. W. Swepson being in this city to 
appear before the committee known as the "Bragg Committee" 
for the investigation of frauds, &c, and why he did not so 
appear before it ? 

A. I saw Mr. Swepson in this city at one time while the 
"Bragg Committee" was sitting. Mr. Swepson sent for me to 
advise him as to his duty about making the report as President 
of the Western Division of the "VV. N. C. R R., which an act 



142 Document No. 11. [Session 

of the Legislature, then recently passed, required him to do. 
I learned from Mr. Swepson that it was then his purpose to 
make the required report and appear before the committee. I 
understood that he left the city the next night without making 
the report or going before the committee. 

Q. Did you hear of his having an interwiew with Governor 
Ilolden in the meantime, and if so, from whom, and what was 
said to have passed ? 

A. After my interview with him above referred to, I heard 
from rumor, and I think from Mr. McAden, that Mr. Swepson 
had an interview with Gov. Ilolden before he left the city. 
as above stated. What transpired at. or what was thepnrpose 
of that interview, I never learned. I feel confident that Mr. 
McAden informed me that such an interview had taken 
place. Mr. McAden advised Swepson to go before tne com- 
mittee. 

Q. Do you know, or have you any information of the draft- 
ing or passage of any of the railroad bills of the sessions of 
1SG8, and 1 SOS- 69 ? 

A. I was employed by Mr. Swepson to prepare various bills 
for the benefit of the W. N. C. It. It. Co., and particularly for 
the Western Division of that company. This, I think, in- 
cludes all the appropriation bills. I did not draw the bill to 
create the Western Division, and all the bills which I drew 
were altered in various ways before they became acts. I simply 
drew the bill and such amendments from time to time as 1 was 
instructed to prepare. 

Q. By whom was the original bill creating the Western 
Division of the W. K. C. It. It. drawn, and by whose influence 
was its passage secured 1 

A. I cannot say with certainty, but think 1 heard it was 
drawn by Col. S. McD. Tate. I do not know how of by 
whose influence, procurement or effort, that, or any other of the 
bills I refer to was passed by the Legislature. I had DO con- 
nection with the bills, except to draw them as instructed. 

( v >. Do you know, or have you any information, of any suit 



1871-'72/| Document No. 11. 143 

brought against any of the railroad companies, or touching the 
constitutionality of any bonds issued by the State \ 

A. A suit was brought against the Chatham Railroad Com- 
pany, I think, in 1SG8 by Galloway, according to my recollec- 
tion, (the case is reported in Supreme Court Reports,) to test 
the validity of the appropriation made in a certain act for the 
benefit of that company. I appeared as counsel, with other 
professional gentlemen, tor the company. I know from the 
reports of the Supreme Court of a suit against the University 
Railroad Company. I know nothing of the first named suit, 
except what appears from the record. I had no connection 
with the latter suit, and onlj' know of it through the Supreme 
Court reports and rumor. I know that a suit was brought, I 
think against the Western North Carolina Railroad Company, 
to prevent the use of a fund appropriated by the Legislature 
for that purpose, to construct a brauch road of that Company 
to the Lime beds in Catawba county. I have heard of other 
suits against railroadjcompanies involving a variety of ques- 
tions, but no questions of fraud to my knowledge or recollec- 
tion. Mr. John T. Deweese at one time (I cannot now fix the 
time, say sometime in the year, 18G9,) proposed to employ me 
as counsel to bring a suit against the Atlantic, Tennessee and 
Ohio Railroad Company to test the validity under the consti- 
tution of an appropriation made for the benefit of that com- 
pany. He suggested that the suit could be compromised, 
after it might be brought, for $100,000 in bonds. I declined, 
for various considerations unnecessary to be stated, to bring 
such suit. 

Q. Can you give any other information connected with any 
matter in the scope of the investigations of this Commission '-. 
If so, state it. 

A. I have no information or belief, other than as I have 
-stated, according to my best recollection. 

A. S. MERRIMON, 

Sworn to and subscribed before J. G. Martin, Commis- 
. sioner. 



144 Document No. 11. [Session 

W. E. Anderson called, sworn and testified : 

Q. What do you know of the bonds, say 5G, which were 
delivered by the public treasurer to J. (i. "Williams, as agent 
for J. M. Heck, on account of the purchase of the penitentiary 
site at or near Lockville ? 

A. I was cashier of the State National Hank at that time, 
and know that the bonds were bought by Mr. Williams as 
president of the bank from Mr. Heck. I think they were 56 
in number of $1,000 each. I do not remember the price, but 
think it was a few cents under the legular price for regular 
N. C. bonds. The money was paid to Col. Heck. The bonds 
were sold in Baltimore, or a greater part of them, by an agent 
of the State National Bank, but were returned upon the hands 
of the bank, and the money returned to the purchaser by the 
bank, upon the plea that said bonds were not recognized as a 
good delivery by the New York Stock Board, and remained 
in possession of said bank up to the time I ceased to be an 
officer of said bank in December, 1870. 

Q. Did Mr. "Williams make any demand on Col. Heck for a 
return of the purchase money or any part thereof, when the 
bonds were returned to him ? 

A. Not that I remember. 

W. E. ANDERSON. 

Sworn and subscribed before me, J. G. Martin, Comin'r. 



Raleigh, May 23d, 1S71. 

Examination of Mrs. Anna B. Cavarly, being duly sworn, 
says : 

That in May, 1868, she was informed by Mr. Cavarly that 
Mr. Swepson had proposed to him to become president of the 
North Carolina Railroad, and run it about six months and then 
go into brnkruptcy himself, and then put the road into bank- 
ruptcy and let them buy it. This was at the Yarbmugh 



1871-'72.] Document No. 11. U5 

House in Raleigh. I immediately went into the parlor, where 
I had a conversation with Mr. Swepson on the subject. He 
told me that he had supposed I had heard the proposition he 
had made to Mr. Cavarly, and said that he thought Mr. Cav- 
arly would make a good president of the road. I replied "Yes, 
that I had heard it, and said to Mr. Swepsov , " You seem de- 
termined to own the whole road." He replied, " Yes, and all 
the other roads in the State." I replied, " You cannot own 
the Raleigh & Gaston Road." He said, " No, all hut that." 
In the same conversation he said " that there was more money 
to be made by the sale of the North Carolina Road than from 
all the other schemes put together." In about two weeks after 
that, Gen. Littlefield came to Raleigh, and I told him of the 
proposition that Swepson had made to Mr. Cavarly. He said 
that Swepson had made the same proposition to him. I was 
afterwards told by Mr. Clingman or Mr. Woodfin, that Little- 
field had told them the same. 

In February or March, 1869, I heard Mr. Pruyn say in 
"Washington City, that he was satisfied with his operations in 
North Carolina ; that he sold the bonds which he had got in 
the Penitentiary business, I think he said, for 60 cents in the 
dollar. I afterwards heard Deweese and Taylor Soute, a 
banker in Maryland, speaking of these bonds. Soute asked 
Deweese, speaking of bonds which Pruyn had sold him, if he 
could hold Pruyn responsible, saying, I think, that Pruyn had 
guaranteed them to him. Deweese replied that " it was hard 
to hold a man responsible who has nothing." 

In a conversation with Gen. Littlefield on the 30th day of 
April of this year, he stated that he heard that Swepson 
alleged that about $240,000 was paid out by him (Swepson) 
to members of the Legislature to procure the passage of bills; 
that he (Littlefield) could prove that it was not all paid for 
that purpose ; that a large portion of it was paid for outside 
influence, among them, a large amount to John T. Deweese 
for outside matters. On the 27th day of June, 1870, I met 
Gen. Liitlefield in the law office of Cross, RicQ& Holt, in New 

10 



1 46 Doourarr N<>. 11. [Session 

Fork. In conversation with him I asked him if he knew 

y were going to sell the Standard office. He replied that 
1 1 Iden would not let it be sold. I asked him why ; he waived 
the question. In course of conversation he said he had 
not paid Holden id lull tor that office, and said he did not 
intend to do so, and that Holden would not let it be sold. 
Upon my again asking why, he said that Holden knew that 
he (Littleficld) knew that Swepson had paid him (Holden) 
$30,000 for his (Holden's) action in one matter. The conver- 
sation was interrupted and he did not say in what manner. 
I asked him in Florida, in April, if my impressions and recol- 
lections of this conversation were correct, and he said they 
were. 

In September, 1S68, in the cars going north, Gen. Little- 
field told me that Dr. Hawkins had given him a hundred 
bonds for getting the Chatham Railroad bill through the 
Legislature ; that he was to have paid him 5 per cent., but 
that he had only sent him one hundred bonds when he ought 
to have sent him two hundred. I know that he sold the 
bonds two days after for 67 cents in the dollar. In Florida, 
in April of this year, I asked him if my recollection of the 
conversation I have given above was correct, and he said it 
wa?, and added that Hawkins, like Swepson, had not sent 
him all the bonds he had agreed to give him. 

ANNA B. CAVARLY. 

Sworn to and subscribed before the commission. 



Raleigh. July lSth, 1871. 

Rev. J. Rki.vion Smith, sworn and testified. 

Q. I>>. yon know ol any money, bonds, or proceeds of any 
bonds, or anything of value being given or offered to any 
member of the Legislature, or of the Convention, to procure, 



lS71-'72.] Document No. 11. 147 

or assist in procuring, the passage of any bill or ordinance 
through either of those bodies I 

A. I know of none. 

Q. Do you remember having had a conversation with Mr. R. 
TV. Lassiter, Senator from Granville, in reference to this mat- 
ter, especially in reference to bonds said to have been received 
by Mr. Mann, and as to a sum of money being placed in the 
hands of the Hon. J. W. Osborne, Senator from Mecklenburg? 

A. I remember of having several conversations with Mr. 
Lassiter with reference to the general subject of corruption in 
the Legislature. I do not remember any conversation with 
reference to Mr. Mann, or Judge Osborne. I do not know 
that Mr. Mann received any money or bonds, or that any 
money was received by Judge Osborne, as Senator, or other- 
wise. Anything I may have stated to Mr. Lassiter, was based 
entirely upon general rumor, but no general rumor affecting 
Judge Osborne reached me. I have never for a moment had 
any doubt of Judge Osborne's integrity. 

J. BRIXTON SMITH. 



Raleigh, July 27th, 1871. 

W. H. Jones, Esq., appeared before the Commission, and 
was qualified and testified. 

Q. State all you know about the sale and purchase of the 
bonds known as the North Carolina Railroad bonds by the 
public Treasurer in the fall of 1868. 

A. I simply know that I purchased $5,000 at 80 cents. 

Q. What was the market price of those bonds I 

A. From SO to 85 cents on the dollar. 

Sworn to and subscribed before the Commission. 

W. II. JONES. 



14S Document Xo. 11. [Session 

APPENDIX TO PENITENTIARY BONDS. 

Hendeeson, X. C, July 24, IsTl. 

Hon. W. M. BrapPj J. B. Bati belob, Es<>., and Gen'l. J. G. 
Mabtdi : 

Gent: At the request of Col. J. M. Heck, President Deep 
River ManufactnriDg Company, T enclose you the within copies 
of papers now in my possession belonging to the Deep Piiver 
Manufacturing Company. 

I am yours, 

Very respectfully, 

A. B ANDREWS. 

"We propose to sell to D. J. Pruyn, of Wake county, Xorth 
Carolina, provided the Penitentiary of the State is located at 
Rieves' Dam on Deep River, in Chatham county, in said State, 
twenty-live acres of land, commencing at a small branch or 
gully a few feet below the head dam at the upper end of the 
race or canal used at the Lockville mills, running up the river 
within fifty feet of the water's edge, and back so tar as to make 
a square of said twenty-five acres, and we propose to give as 
much water power at said Rieves" dam as the State may use in 
said Penitentiary, provided the State shall keep up the said 
Kieves' dam and the lock at the same, in consideration of which 
we will charge the State no tolls for the use of the lock at said 
Rieves' dam. We also propose to sell to the said D. J. Pruyn, 
ht thousand acres of land including the Nathan Douglass 
property on the Cape Fear River ami Danley's Creek, con- 
taining about three hundred and fifty acres; the property im- 
mediately above on Danley's Creek containing about one 
thousand acres, and six thousand six hundred and fifty acres of 
land adjoining the houseland land on which Or - John AY. Mc- 
Kay resides, for all which foregoiug described land we agree to 
take the Mini i evi n dollars | in State bonds of 



1S71-72.] Document No. 11. 149 

the State of North Carolina at par within thirty days from this 
date, Nov. 9, 1SGS. 

(Signed) J. M. HECK, 

President Deep River Mcmufcicturirig Company. 

We guarantee the performance of the foregoing proposition. 
(Signed) W. J. HAWKINS, 

(Signed) G. W. SWEPSON, 

G. Rosenthal, witness as to W. J. Hawkins and G. W. 
Swepson. 

I accept the foregoing proposition. 

(Signed) D. J. PRUYN. 

November 9, 1S68. 

I certify that the above is a true copy of a paper now in my 
possession belonging to the Deep River Manufacturing Com, 
pany. 

A. B. ANDREWS, 
Secy, and Treas. Deep River Manufacturing Co. 



Raleigh, N. C, Nov. 12, 1SGS. 

Received of Col. J. M. Heck, President Deep River Man- 
ufacturing Company, an obligation of the Public Treasurer 
of the State of North Carolina as collateral security for the 
payment of a certain note made by said Heck, president, etc., for 
fifteen thousand dollars and interest, payable to State Na- 
tional Bank, which obligation or bonds to be received there- 
under, to be returned on payment of said note, or accounted- 
for if sold. 

(Signed.) W. E. ANDERSON, Cashier. 



150 Document No. 11. [Session 

I certify that the above is a true copy of a paper now in my 
possession, belonging to the Deep River Manufacturing Com- 
pany. A. B. ANDREWS, 

Trcas. and !Sic. D. R. Jf. Co. 



Raleigh, N. C, May, 31, 1869. 

Dr. W. J. Hawkins, 

Dear /Sir: You can have the whole of the lumber at Deep 
river at and near Lockvillc, consisting of about two hundred 
and thirty thousand feet of timber, and a few thousand feet of 
lumber or board, (a small part of the timber is still in the 
woods,) for twelve hundred and fifty dollars, which amount 
you will please pay the Deep River Manufacturing Company. 

Yours truly, 
(Signed.) D. J. PRUYN. 

I certify that the above is a true copy of a paper now in my 
possession belonging to the Deep River Manufacturing Com- 
pany. 



A. B. ANDREWS 



Treats, and Sec. D. It. M. Co. 



Raleigh, N. C, January 13th, ISO'.). 
This is to certify, that when I was before the Senate Investi- 
gation Committee, [ stated on oath that lam a regular engineer, 
well accpiaintcd with the works on Deep River, having had 
more or less to do with the building ot almost every lock and 
dam on the river, and, that I regard the water-power at Ricves* 
dam (the one from which supply of power for the Penitentiary 
is to be drawn) the most valuable for manufacturing purposes, 
that I know on the) river. I also stated that I regarded the 



1871-'72.] Document No. 11. 151 

present site the best that could be selected tor a Penitentiary 
using that water-power, except, it I were architect I would 
change the present plan of the building about fifty (50) feet, 
which would save expense in grading, a matter, the expense of 
which I thought had been very greatly over-estimated. I had 
made some rough estimate of the cost, and thought the grading 
would not exceed three thousand dollars. I also stated that it 
they did not use that water-power, that they could not get any 
other available for constant work in high and low water on the 
river. 

(Signed,) D. G. McDUFFIE, 

Civil Engineer. 

Witness. (Signed,) C. II. K. TAYLOR 

I certify that the above is a true copy of a paper now in my 
possession belonging to the Deep River Manufacturing Com- 
pany. A. B. ANDREWS, 

Treas. and Sec. D. R. M. Co. 



DEED TO D. J. PRUYN. 

North Carolina, Wake County. 
This deed made by the Deep River Manufacturing Company 
to D. J. Pruyn, of said County, this December the 2nd, 1868, 
witnesseth : That the said Deep River Manufacturing Company 
in pursuance of a contract heretofore made, in consideration of 
seven dollars per acre in new bonds of the State of North 
Carolina to said Company paid by the said D. J. Pruyn the 
receipt of which is 'hereby acknowledged, has bargained and 
sold, and do by these presents, sell, bargain and convey unto 
the said D. J. Pruyn and his heirs, the following tracts of Land, 
aggregating eight thousand acres, viz : 1st, the Nathan Douglas 
property, on Cape Fear River and Danley's Creek, containing 
about three hundred and fifty acres, lying in Harnett county, 



152 Docimi.nt No. 11. [Session 

bounded on the west by X. & J. W. McKay's land, on the 
fli by Yearby Thomas' land and John W. McNeill's land, 
and now the lands of the Deep River Manufacturing Company, 
on the east by the same and the Cape Fear River ; on the 
north by William Underwood's and Alex. Gilchrist's, including 
the residence of Nathan Douglas, Iron Hill, or Mineral Hill, 
it being the land purchased in part by said Douglas from John 
Drake, or see the records of Cumberland and Harnett coun- 
ties. 2nd. a tract in the counties of Harnett and Moore, in- 
cluding the lands bequeathed by Neill McKay, dee'd, to M.M. 
McKay, and by him the said M. M. McKay, conveyed to Malcom 
McKay, and by him the said Malcom McKay to Neill and J. 
II. McKay, and a tract known as the Spring tract, which was 
conveyed b} r A. [V>. Horton, adm'r of M. Spivy to Juhn 
11. McKay, including the lands known as the Mill tract, 
and also the tract known as the Mineral Spring tract, contain- 
ing, by estimation, one thousand acres as on reference to the 
first named tract to the records of Cumberland county, and to 
the Spivy land, to the records of Harnett county. 3d. Six 
thousand six hundred and forty acres of the following described 
tracts of lands in the counties of Harnett and Moore counties, 
lying on the north side of the old road between Summer ville 
and Neill McKay's land, in Moore county, bounded by the 
lands of Neill McKay, Esq., there belonging to the estate of 
Murdock McLeod, deceased, Jas. S. Harrington, Neill McKay, 
Jr., the Rethca land, James M. Turner and the lands of the 
estate of Noah Buchanan and others, including a part of a 
five thousand acre survey, and a three thousand acre sur- 
. patented by John Gray Blount, and conveyed by 
William B. Rodman and others to Neill McKay and John 
W. McKay ; also, six hundred and forty acres, patented 
by the said John W. Mckay ; also, a piece patented by Jas. S. 
u and John Harrington and Neill McNeill and 
Sector McNeill and others, and by them conveyed to Neill 
McKay and John W. McKay, all which tracts containing ten 
thousand acres, as appears on records of Cumberland and liar- 



1871-72.] Document No. 11. 153 

nett counties. The said 6,G50 acres to be hereafter surveyed 
and laid off it the parties cannot agree by arbitrators, to be 
chosen by each respectively : To have and to hold the above 
mentioned eight thousand acres of land to the said Pruyn and 
his heirs and assigns forever, together with all appurtenances 
and privileges thereunto belonging. And the said Deep River 
Manufacturing Company, for the consideration aioresaid, does 
covenant for itself and its assigns, that it will forever warrant and 
defend the title to the foregoing lands conveved ac-ainst the 
claims of all persons lawfully claiming whatever, and that the 
said company will make such other and further conveyances 
for ourselves of title as may be proper to- suit the case as pro- 
vided in said Pruyn and his heirs in fee simple. 

In testimony whereof the president of the said Deep River 
Manufacturing Company and George W. Swepson and A. B. 
Andrews, two directors and stockholders thereof, have set their 
hands and seals and the seal of said corporation, the day and 
date above written. 

(Witness,) V. Ballard. 

J. M. HECK, President, (seal.) 
GEORGE W. SWEPSON, (seal.) 
A. B. ANDREWS, (seal.) 

Harnett County, in the Probate Court. 

The execution of the foregoing and within deed from J. M. 
Heck, President of the Deep River Manufacturing Company, 
and Geo. W. Swepson, stockholder, and A. B. Andrews to D. 
J. Pruyn, was this 16th day of September, 18G9, proven before 
the undersigned, Judge of Probate for said county, by the oath 
and examination of V. Ballard, the subscribing witness thereto. 
Therefore, let the said deed with this certificate be registered. 
State tax, $14.25 ; paid. County tax, $14.25; paid. 

B. F. SHAW, 
Prolate Jud'je. 



154 Document No. 11. [Session 

Register's Office, Sept 16th, 18C9. 

Then was the foregoing deed and certificate registered in 
book "C," pages 251-52. 

A. KIVETT, 

Register. 

Register's Office, 
Harnett County, May 22d, 1871. 

I, J. A. Sexton:, Register of Deeds, certify that the fore- 
going and within deed is a true copy from the records. 

J. A. Sexton, 
Register of Deal*. 

[copy.] 

AGREEMENT OF J. G. WILLIAMS WITH J. M. HECK. 

John G. Williams, President, "\Vm. E. Anderson, Cashier. 

AUTHORIZED CAPITAL $500,000. 
STATE NATIONAL BANK OF RALEIGH, NORTH CAROLINA, 

Baltigh, N. C, Dec. 7, 1SCS. 

We have bought from J. M. Ileck, President of the Deep 
River Manufacturing Company, fifty-six thousand dollars of 
North Carolina bonds which are not a good delivery on the 
stock market of New York, for the sum of twenty-nine thou- 
sand dollars. "We take said bonds at our own risk and without 
recourse of any kind either on said J. M. Heck, or on said 
Deep River Manufacturing Company. Said bonds were issued 
under an act of the General Assembly of North Carolina in 
relation to the employment of convicts and the erection of a 
Penitentiary and are numbered from one to fifty-six. 

(Signed.) JOHN G. WILLIAMS, 

P 'resident State Kational Bavl'. 

I hereby certify that the above is a true copv. 

THOMAS BADGER. 



1871-72.] Document No. 11. 155 

Raleigh, April 29th, 1871- 
WESTERN RAILROAD COMPANY. 

Mr L. C. Jones was sworn, and testified : 

I am president of the Western Railroad. I was elected on 
the — January, 1871, to fill an unexpired term, and re-elected 
on the first Thursday in April, for the year ending March 1st, 
1872. After I was elected president, I demanded of A. J. 
Jones, former president, the special tax bonds and all effects 
and assets in»his hands or under his control, belonging to the 
company. He refused to surrender the special tax bonds or 
the proceeds of them. He stated that it was not a proper 
tribunal to settle with, that he would do it with the stockhol- 
ders. I asked him where the special tax bonds were ? He said 
he did not know, but supposed they were all sold ; he supposed 
they were sold in the fall of 1S70. He did not say what he 
did with the proceeds. He presented an account against the 
company, which he claimed as vouchers, to the amount of 
about $55,000. He refused to leave the account with us unless 
the whole amount was allowed, but left with me personally a 
copy. 

Q. State whether you have examined this account and 
whether or not it is correct, and due from the company to 
Jones ? 

A. I have examined it ; a portion of it is correct, but a large 
portion is not. The account is herewith filed, as likewise another 
copy of an account admitted to be correct. 

Q. Were you the former chief engineer of the Western 
Road ? and can yon give any information as to the contract 
made with J. A. Hunt & Co? If so, state all you can about 
it. 

A. I was chief engineer at the time A. J. Jones was presi- 
dent. At the time Mr. Hunt made his bid, there was also a 
bid from Martindale & Co. for the construction of the road 
from Egypt to Greensboro 1 . There was a bid at the same 



156 Document No. 11. [Session 

time from L. J. Haughton, of Chatham county, for the con- 
struction of the road from Egypt to Ore Hill. Mr. Haughton's 
prices ranged but a little higher than the estimates made by 
the chief engineer. Ma tindale & Co., offered to do the work 
lor about $80,000 less than Hunt's prices, and to receive pay- 
ment in first mortgage bonds ot the company, allowing for 
these bonds ninety thousand dollars more than Hunt proposed 
to take them at, making an aggregate difference to the com- 
pany ot $170,000 between the bids. Copies of the contract of 
Hunt and ot the bids of Haughton and Martindale & Co., 
are herewith filed, marked (A) and (B) ; Haughton's (A) and 
Martindale's (B.) 

Q. Do you know the pecuniary condition of Hunt & C<> '. 

A. I knew nothing of their condition at the time of the 
contract. I have since learned that they were both insolvent 
at the time, and notoriously so. 

Q. Please state anything further you know relative to the 
acceptance ot the bids of Hunt ct Scales. 

A. After the bid of Martindale 6c Co. and Haughton had 
been received, A. J. Jones, President, went to New York. 
When he returned he handed me a bid from J. A. Hunt & 
Co. on the work, and asked me to write to Hunt, who was in 
Alabama, to come on, that his bid would be favorably con- 
sidered by the directors. I glanced over the bid and replied 
to the President, that it ought not to be accepted without 
considerable modification, and called his attention to tbe 
prices for work, which were about $25,000 more than tin 
engineer's estimates. Upon further examination of Hunt's 
bid I found that it was $SO,000 more for the work than Mar- 
tindale's & Co's bid and $90,000 difference in the price of the 
bonds, Martindale agreeing to take the bonds at 70 cents and 
Hunt only at GO cents. Martindale & Co's bid was about as 
low as the estimates of the engineer. I called Mr. Jones' 
attention to this difference in the bids, and also to the part of 
the bid referring to the purchases of iron, which I thought 
ought to be rejected. In the meeting of the Board of Direct- 



1871-72.] Document No. 11. 157 

ors when the several bids were under consideration, A. J. 
Jones said that he was opposed to accepting the bid cf Drane 
& McDowell, because they were too high, and Drane had been 
a partner of his, and if he gave them the contract it would be 
said to be his (Jones') contract ; that Haughton could not do 
the work at his prices; that Martindale & Co. were carpet- 
baggers, and if the contract was given to them the odium 
would be attached to him and to the Board of Directors ; that 
J. A. Hunt & Co were responsible men, he believed, and 
would do the work, and he preferred to let them have the 
contract. After the meeting of the Board of Directors, 
Hunt came on and the contract was closed with him, being 
signed in Mr. Fuller's office. Tne copy of the contract with 
Hunt is filed, marked (C). Hunt went to work shortly after 
signing the contract, and worked from that time until the 
transfer of the contract from him to Mr. Lutterloh took place. 
Date of the transfer is January 1st, 1871. 

Q. Do you know anything about the assignment of this 
contract to T. S. Lutterloh, and if so, state all you know 
about it ? 

A. Mr. Lutterloh returned from New York the latter part 
of December, 1870, and told me that he had bought Hunt's 
contract for $500, and said to me that it was necessary that I 
should consent to the transfer of the contract, and handed me 
the papers assigning the contract. I made no reply but 
returned him the papers. On the day the transfer was 
approved, I asked Mr. Lutterloh not to insist upon m} 7 signing 
the transfer, as within a few days a new organization would 
come in under an act of Assembly which had recently passed. 
I told him the new organization would declare Hunt's original 
contract null and void and consequently, the transfer would 
be worthless. I then said I would not consent to sign the 
transfer unless it was ordered by the Board of Directors. 
The Board of Directors was convened on January 1-ith, 1871, 
and was composed of A. J. Jones, President, T. S. Lutterloh, 
D. J. Underwood, John A. McDonald and J. W. Hopkins, 



15S Document No. 11. [Session 

and passed a resolution directing- me to approve the contract. 
I did so in the following language : " I consent to the above 
transfer by order of the President and Directors of the "West- 
em Railroad Company." I protested against it because ot 
reasons above stated, and had determined to resign my 
position as chief engineer rather than do it, but was dissuaded 
from that step by friends who were large stockholders in the 
company, and advised by them to consent to the transfer, i{ 
ordered to do so by the Board of Directors, rather than resign. 
in order that there might be somebody to aid the private 
stockholders in getting possession of the road in case there 
was a reorganization. 

Q. Do you know who were the active directors in the board 
during the administration of A. J. Jones? 

A. A. J. Jones and T. S. Lutterloh, seemed to be the most 
prominent. 

Q. Do you know anything about how the special tax bonds 
were used, or sold, or transferred? 

A. I know nothing except from common rumor. 

Q. Do you know anything about the making ot the mort- 
gage of the road to certain trustees named therein ? 

A. In a general meeting of the stockholders in April 1870, 
a resolution was ottered authorizing the president and directors 
to mortgage the road tor $900,000. It was strongly opposed 
by a majority of the private stockholders, especially by A. A. 
McKcthan, D. G. McKae and others. The resolution was 
carried by the vote ot the State proxy. The private stock- 
holders were willing to mortgage the road, provided the trus- 
tees of the mortgage were selected by the private stockholders. 
and an}- amount arising from the sale of the first mortgage 
bonds should be placed in their custody. 

Q. Do you know of A. J. Jones paving large sums ot money 
to any one in Fayettcvillee after he was president and after 
these bonds came into his hand.-: 

A. After Jones went north during the summer ot 1SG9 to 
sell these bonds, as it was understood, a rumor was current in 



1871-72.] Document No. 11. 150 

Fayetteville that he had made a large amount of money by 
speculation in some Georgia bonds. I met his brother Mr. T. 
J. Jones, in Ileide's confectionary one night after supper. I 
mentioned the rumor to him, and ashed him if it were true 
that his brother had made as much as reported. lie replied 
that he believed it was true, inasmuch as he had sent him 
$25,000. 

Q. What was T. J. Jones' business in the town of Fayetteville j 

A. He was in the banking business with Lutterloh shortly 
before or after this time. I am inclined to think he commenced 
the business shortly afterwards. 

Q. State all you know about the modification of J. A. Hunt's 
contract, after its transfer to T. S. Lutterloh. 

A. The modifications of the contract spoken of were made 
after its assignment by Hunt, & Co., to Lutterloh. At what 
precise time, by whom or for what assigned reason they were 
made, I do not know. 

Q. Was Mr. Lutterloh, at the time of these modifications, a 
member of the board of directors, and was he a member after- 
wards? 

A. He was a member of the board both before and after- 
wards and continued so until the reorganization of the com- 
pany. 

Q. Did Mr. Lutterloh get possession of the mortgage bonds'* 
If so how, in what character, and what has he done with them ? 

A. At the time of the transfer, he was already trustee, and 
by that transfer he became contractor ; the modification made 
him both contractor and agent, and he got under his control, 
the whole $900,000 of the first mortgage bonds. The com- 
pany threatened to prosecute him, whereupon he surrendered 
$160,000 first mortgage bonds, and the remainder I understand 
to be in the possession of L. P. Bayne & Co., New York, sub- 
ject to a claim of $20,000, money alleged to be advanced by A. 
-J. Jones to Hunt & Co. 

L. C. JONES. 

Sworn to and subscribed before the Commission. 



ICO Document No. 11. [Session 

Rai.kk.ii, May 1, 1S71. 

Mr. Thomas J. Jones wafl sworn and testified. 

Q. Where do } T oulive and what is your occupation '. 

A. I live in Fayetteville ; have lived there about live years. 
I was a member of the banking house of Jones & Lutterloh, 
which commenced business in June or September, 1SG9, and 
continued business up to September last. 

Q. What is your relation to A. J. Jones, former President 
of the "Western Pailroad ? 

A. I am a brother. 

Q. Did you ever have any conversation with A. J. Jones 
relative to the special tax bonds ? 

A. I never had any conversation with him, that is, special 
conversation. 

Q. Have you any knowledge personal, or from others, how 
he disposed of these bonds ? 

A. I have none, except from an affidavit made before Judge 
Pearson, in which he stated that he had disposed of all these 
bonds in the fall of 1870. 

Q. Did he ever deposit any of the special tax bonds with 
Jones 6c Lutterloh as a special deposit or otherwise ? 

A. On one or two occasions he gave me packages, the con- 
tents of which I did not know, and asked me to deposit them 
in the vault. 

Q. Did he ever deposit any money with the banking house 
during his administration as President of the "Western Poad I 

A. lie did at various times deposit various sums, but cannot 
tell what without referring to the books of the company. He 
deposited generally in his own name, but understood to be on 
account of the road, lie lias overdrawn to the amount of 
about $10,000. 

(,>. Did Mr. Andrew Jones pay you large sumaof monej 
since he came into possession of these bonds i 

A. He paid me considerable amounts during the year 1869. 

lie paid me between the 1st and the 5th of Jane, $25,000, 



1871-72.] Document No. 11. 161 

and after that, in two payments, he paid me about $20,000 in 
July, '69. 

Q. Do you know from what source lie derived that money ? 

A. I do. From his own private funds acquired before he be- 
came President of the road. I know the fact that he had 
$160,000 available funds when he was elected President of this 
road. 

Q. "When did you purchase this banking house ? 

A. In September, 1S60. 

Q. What did you pay him '. 

A. About $12,000. 

Q. What capital did you and Mr. Lutterloh put into that 
bank ? 

A. I do not remember the amount of capital. Mr. Lutter- 
loh put in nothing, and I put in at various times about $46,000. 

Q. On what account did Mr. Andrew Jones pay you these 
amounts ? 

A. It was payments on debts that had accumulated since and 
before the war, and for security money also. 

Q. Did Mr. A. Jones have any interest in that bank \ 

A. None whatever. 

Q. Did he ever make any settlements upon any members 
of your family since June, I860 % 

A. He did not. 

Q. Have you any funds in your hands belonging to Mr. 
Jones, or do you know any one who has ? 

A. I have none, and do not know of anyone who has. I 
think he is insolvent, because he owes me and don't pay. I 
have no idea what he has done with the means he had in his 
hands. 

Q. What were vour means when yon went into this banking 
house ? 

A. I had considerable means in different shapes. I supp-ose 
I had $20,o00 in real estate. I had an interest in the mercan- 
tile firm of Jones <fc Worth in Fayetteville. That firm wag 
dissolved in the Spring of 1870. The business is not wound 



1G2 Document No. 11. [Session 

up. and I do not think the profits of the concern will be very 
large. 1 had $6,000 in bonds of the city of Wilmington worth 
$75 per share. I had sir.,i>on Iiladen county bonds which I 
consider perfectly good. I have private claims which I 
think are worth $25,000 to $30,000. I owned this property 
at the time I went into the firm of Jones S: Worth, and into 
the hanking business, but most of the money I had in the 
bank was the [money paid me during the year 1869, by my 
brother, A. J. Jones. 

Q. Do you know anything of the mortgage made by the 
company or the mortgage bonds ? 

A. I know nothing, except the mortgage was made for 
$900,000. 

Q. "Will you state what you know about the contract of 
Hunt & Scales with the Western Railroad Company and the 
transfer of that contrast ? 

A. I know nothing of the contract, except from hearsay. I 
know that there was a contract, but nothing of the circum- 
stances of the contract. All I know of the transfer of the 
contract is the following conversation : A few days before the 
called meeting of the stockholders in January, 1871, I stepped 
into my brother's room, where I met L. C. Jones and Lutter- 
loh. As I walked in, L. C. Jones remarked, "I will refer the 
matter to Mr. T. J. Jones, with whom I have conferred before, 
and whose opinion I have confidence in.'' lie then stated 
that Lutterloh had bought the Hunt & Scales contract, and 
desired him, as chief engineer, to approve of its transfer. He 
had objected to doing it, as the stockholders would meet in 
two or three days, and there would be a new board elected ; 
thatit might prejudice the minds of the new board to have it 
transferred immediately on the eve of an election. He had 
advised Mr. Lutterloh to wait until the election, as a majority 
'4 his friends would be elected directors, and would approve of 
the transfer ; that he, (L. C. Jones.) was in favor of the mort- 
irace and of the contract to Hunt <Sc Scales, and also of the 
transfer to Lutterloh, as the work would be now pushed, and 



1871-72.] Document No. 11. 163 

he was certain the road would be built, but he preferred to 
wait until the meeting of the new board before approving the 
transfer. I then said if the contract with Hunt c\: Scales was 
made in good faith, and it it was purchased by Lutterloh in 
good faith, I saw no reason why it should not^be transferred at 
once. L. C. Jones then said that there was a majority of the 
board of the directors in town ; that it he could get them 
together and hold a meeting, and if they would direct him to 
make the transfer, he would do it. I know nothing further of 
the transfer. 

THOS. J. JONES. 
Sworn to and subscribed before the Commission. 

Thomas S. Luttekloh, sworn : 

Q. "What was your position in the Western Road during the 
last year of the administration of A. J. Jones ? 

A. I was a Director, one of the Trustees under the mortgage 
made by the Compan} 7 , and also one of the Committee ap- 
pointed by the Directors to let out the contract for the con- 
struction of the road. 

Q. Do }-ou know what disposition Mr. A. J. Jones made of 
the 1,320 special tax bonds which came into his hands as Presi- 
dent of the "Western Railroad Company, about June 22d, 18C9 i 

A. I only know from what he has told me. Jones and I 
came to Raleigh together for the purpose of getting the bonds 
about June 22d, 1S69. We went to the Treasury Depart- 
ment and got 1,320 State bouds. W r e took them to New York 
and Jones placed them in the vault cf the Bank of the Repub- 
lic. He did not sell any bonds while I was there, but after- 
wards reported the sale of fifty-five. 

Q. Since your testimony given before the Bragg Committee, 
March 10th, 1S70, have you any information from Mr. A. J. 
Jones, or otherwise, how he has disposed of the remainder of 
the 1,320 State bonds? 

A. Jones told me, in the winter of 1S70, in Tsew York, that 
Utley & Dougherty and L. P. Payne & Co., had sold all the 



164 Document No. 11. [Session 

balance of the bonds. He did not tell me what he had potior 
the -whole of them, but had got 17 cents in the dollar for the 
last. L. P. Bayne& Co., also told me they had sold the bonds 
in their hands. 

Q. Do you know of Jones receiving any monej for the pro- 
ceeds ot those bonds '. 

A. I don't know of any, except it be *20,000 that was ]>aid 
to Hunt, former contractor. 

Q. Do you know whether A. J. Jones has now in his hands, 
or under his control, any funds belonging to the Western Rail 
road Company ? 

A. I know of two or three parties who owe him. I don't 
know whether it is Railroad money or not, but rather think it 
is. lie told me that Littlefield owed him about $25,000. E. 
W. Ilardie owes him a balance of about £$00 on a note payable 
to A. J. Jones. I owe him about §500. He told me Dr. Sloan 
owed him $100,000, but I understand Sloan denies the debt. 
There is a settlement to be made between Jones and Hardie, 
and I don't know what the balance will be. 

Q. State, if you know anything, ot any amounts of money 
paid by A. J. Jones in reference to any suit or suits, in the 
courts of North Carolina respecting the validity of the special 
tax bonds I 

A. While Jones and I were in New York in July or August, 
1809, he informed me that a bill for attorneys' fees tor |10l 1,01 M I 
had been sent on from North Carolina against Swepson and 
Littlefield, ami the different railroad companies in this State. 
He declined paying any portion of it at that time, saying that 
he would refer it to his board. About the 1st of July he 
promised to pay J. W. Hinsdale $100 to come to Raleigh to 
obtain information of the decision of the Supreme Court in a 
case then pending before it in reference to the constitutionality 
ot the special tax bonds, and telegraph him the result. I 
think Hinsdale did telegraph him. Mr. Hinsdale was not 
attorney for the railroad or employed in this case, bat happened 
to be in New York at the time. I do not know rf any other 



1871-'72.] Document No. 11. 165 

sums paid or contracted to be paid in reference to these 
bonds. 

Q. Since your examination before the Bragg committee, has 
A. J. Jones ever'told you, or have yon any knowledge or infor- 
mation of any special tax bonds or the proceeds thereof, or any 
money being paid to any member of the Legislature or Con- 
vention or any officer of this State to procure the passage 
of any bill or bills through the Legislature or Convention ? 

A. I have no knowledge on the subject, and never heard 
Jones say anything about it. 

Q. Have you stated fully all your knowledge and informa- 
tion, in reterence'to the special tax bonds issued to A. J. Jones 
as president of the Western Railroad Company ? If not, state 
fully any facts that have come to your knowledge, or any other 
information you have in reference to these bonds '. 

A. I know of no other facts, and have no other information 
beyond what was given before the Bragg Committee and in 
this examination. The account of $100,000 sent to New York, 
I understood to be exclusively for attorneys fees. I know that 
there was a meeting of many of the presidents and officers of 
the various railroads of this State in New York at the time 
that Jones and I were there. I saw Swepson, Littlefield, Jones, 
Tate. Stubby Worth, Sloan, and Col. Cowan. They were in 
frequent consultation, but I was not present, and do not know 
their proceedings. There was large speculation in those bonds 
at the time with the brokers, by most it not all these Railroad 
Presidents and others. 

Q. Were you one of the committee who made the contract 
with Hunt and Scales, for building the road from Egypt to 
Greensboro'? If so, state all you know about it. 

A. I was one of tne committee. Several bids were put in 
for the work, one by "J. A. Hunt & Co., one by Martindale & 
Co., one by Drane aud,McDowell, and one by L. J. Haughton 
for a part of the] work I advised that the work of the con- 
tract should be given if they could do so, to native citizens. 
And at the request of Mr. Jones, I saw Mr. A. A. McKethan. 



166 Document No. 11. [Session 

and Mr. J. I). Williams, and asked them if tliey would take 

an interest in the contract, which they declined to do. The 
bid of Martindale & Co., was the lowest, bnt the hoard thought 
they would not do the work. The hoard had most c< lence 
in Hunt & Co., and the contract was awarded to them. 

Q. Did you know anything of the pecuniary condition of 
Hunt and Scales at that time? 

A. I knew nothing except what A. J. Jones told me. lie 
said they were reliable men and had had contracts in other 
portions of this State and Alabama, and could put on a force 
at once. 

Q. Did you take any bond or security from them for the 
performance of their contract \ 

A. No, we did not, it was not usual on our road. 

Q. What work was done by Hunt and Scales on the road ( 

A. Perhaps 6,000 or 7,000 dollars worth up to the time I 
bought their contract. They worked over two months. The 
company advanced a small amount, perhaps six or seven hun- 
dred dollars to buy provisions, &c, 

Q. "Was the contract with them made according to engineers'" 
estimates or how '. 

A. It was something over engineers estimates. Earth work 
by estimate was 18 cents. Hunt got it at 19 and 20 cents. 
Rock work by estimate was 1.30. Hunt got it at 2.00. Hunt's 
bid was, 2.50, but he and L. C. Jones split the difference and 
settled on $2.00. The whole matter of prices with Hunt & Co., 
was fixed by L. C. Jones, Chief Engineer. 

Q. Was there any other party so far as you know or are in- 
formed interested in the contract, besides Hunt and Scales .' 

A. Hunt told me that (i. W. Swepson was interested in the 
contract. No one else that I know. When I tried to pur- 
chase tin- contract, he hesitated and said he would have to 
consult Swepson in the sale of th ■■• contract. 

Q. Do you know that A. J. Jone3 was inter sted, or did 
you ever hear him say at any time that be was interested in 
any way whatever? 



1871-'72.] Document No. 11. 167 

A. He never said positively to me that he was. My im- 
pression from conversation was that Jones, Hunt and Swepson 
were interested together. I inferred this from the fact that 
Hunt came to Fayetteville and put in his bid, and he and 
Jones left about the same time for New York. Hunt returned, 
and not finding Jones, returned to New York after him and 
brought Jones back to Fayetteville with him. I think from 
circumstances that Hunt was decidedly Jones' favorite. 1 
tried to get the contract myself and he said that I could not 
get it, as I was one of the directors. It was then I went to 
McKethan and Williams, and they declined to go into it at 
Hunt's bid. 

Q. Was there any understanding, expressed or implied, 
between you and Hunt, that this contract should be assigned 
to you % 

A. There was not. 

Q. Will you state the circumstances under which you pur- 
chased the contract from Hunt ? 

A. I went to New York with A. J. Jones, who had the 
$900,000 of first mortgage bonds in his possession. Jones, 
McAden, Rogers and myself met together in New York. 
The bonds were deposited with L. P. Bayne & Co., after retain- 
ing $15,000 I became uneasy about the safety of the deposit 
of the bonds and thought it necessary, to protect myself and 
the company, to purchase Hunt's interest in the contract. I 
then went to Hunt and proposed to him to purchase his in- 
terest. He told me that Swepson, who was in New York at 
tne time, said he must have $50,000 for the contract. After- 
wards he concluded to take $20,000 for it, which I agreed to 
give. 

Q. Will you state howmuch you did pay Hunt for the con- 
tract and how the same was paid? 

A- I paid him in my note at 30 days, $500, which was 
assigned to Askew, and which I took up to-day. A. J. Jones 
had advanced to Hunt, previous to that time, $20,000, and 
held Hunt's receipt for that sum, which I was to allow to the 



L68 Document No. 11. [Session 

apany in part payment of the contract that was to be 
assigned to me. I got a lot of shoes, -wheelbarrows and har- 
ness with the contract and the work already done by Hunt. 

Q. Did you then get the possession of the whole number of 
the mortgage bonds? 

A. I did not. I got possession of $460,000, which I have 
recently turned over to the company, and have likewise .sur- 
rendered my contract. The remainder of the bonds, to wit : 
$4:25,000, are still in the possession of L. P. Bayne & Co., 
claimed by them as collateral security for a draft of $20,000 
or upwards, drawn on them by A. J. Jones in favor of Hunt 
tfc Co., to pay the $20,000 mentioned above, and which was 
accepted by L. P. Bayne & Co. In addition to this security, 
L. P. Bayne & Co. hold two notes on me, one for $10,000 and 
one for $10,500, which they claim as collateral security for 
the payment of the same sum of $20,000, 

Q. Will you state what became of the other fifteen bonds ? 
Why they were taken out, and how were they used '. 

A. Mr. McAden got five, II. J. Rogers got five, and I got 
five, as trustees, for our services. I do not know what Mr. 
Rogers and Mr. McAden have done with their five bonds each. 
I have mine. 

Q. Please state how you got possession of the 400 bonds 
from Bayne & Co., and your understanding with them as to 
the remaining 42T> \ 

A. I got an order on Bayne & Co., for the whole of the 
bonds from Jones and Hunt, lie surrendered me 4G0, and 
gave me a receipt for the remainder, subject to this claim of 
$-2o.i mid. 

Q. Will you state who H. J. Rogers is, and what connec- 
tion he has with J.. P. Bayne A: Co. '. 

A. lie is a partner of L. P. Bayne & Co. Rogers and Mc- 
Aden insisted upon retaining $5,000 each, and that it was the 
custom among brokers to make that allowance to trustees on 
mortgage bonds. 



lS71-'72.] Document No. 11. 169 

Q. At whose instance was the contract with Hunt & Scales 
modified, as it is called '( 

A. At mine. 

Q. Were you present in the Board of Directors when it was 
done ? 

A. I don't think there was a meeting of the Board. I think 
the committee did that. I was one of the committee. 

Q. Do you know how Mr. L. C. Jones' assent to this trans- 
fer was obtained or brought about '( 

A. The Board had a meeting, at which Mr. L. C. Jones, 
Engineer, was present, and which authorized him to approve 
the transfer. He had first promised and then declined, and 
advised me to wait until the stockholders met. I did not do 
so, but had the board called together and he made the appro- 
val under the direction of the board. 

Q. Can you give any additional information in reference to 
A. J. Jones' dealings with the banking house of Jones & Lut- 
terloh beyond what was stated before the Bragg Committee ? 

A. A. J. Jones had no interest whatever in the bank and I 
have stated all the matters connected therewith before the 
Bragg Committee, except an explanation given in an additional 
statement which I desire to add, to wit : In my statement 
before that committee, that A. J. Jones had to his credit, as 
President of the "Western Railroad Company, forty-three thou- 
sand three hundred and ninet} r -three dollars and thirteen cents. 
In this I was mistaken, and the mistake occurred as follows : 
A. J. Jones requested me in October or November, 1S69, to 
request T. J. Jones to have transferred from his (T. J. Jones') 
account to A. J. Jones' account, as President, &c 3 $20,893.13, 
and in January, 1870, he made the like request for the trans- 
fer of $30,300. I mentioned it to T. J. Jones, who told me it 
should be done, and I supposed, when I gave in the statement 
in Raleigh in 1870, that it had been done, as T. J. Jones had*a 
larger sum to his credit than the two sums together specified 
above. I did not discover the mist.ike until afterwards when 
I saw the bank book of A. J. Jones. 



170 Document No. 11. [Session 

Q. Was anybody interested with you directly or indirectly, 
expressly or impliedly, in the purchase of the contract from 
I runt &Co? 

A. T may have told T. J. Jones that lie might take an inter- 
est in the con tract, hut never told any one else. 

Q. How much do you think the contractors could have made 
on that contract ( 

A. If funds could have been raised to have built the Bail- 
road through to Greensboro, they could have made at least 
£1. '0,000. I think §50,000 could have been made on the iron. 

T. S. LUTTERLOll, 

Sworn to and subscribed before the Commission. 



Raleigh, May 3, 1S71. 

William (r. Rroadfoot testified: 

I was the cashier of the bank of Jones & Lutterloh, in the 
town of Fayetteville, froai about the first of September, 1869, 
to January, 1871. Jones & Lutterloh continued the business 
ot P. A. Wiley & Co., having purchased their interest in the 
bank. It was a private bank. The bank had no fixed capi- 
tal. P. A. Wiley & Co. were using a fixed capital of about 
$10j000, and T. J. Jones did not pay into the concern more 
than about s3,000 in money. The bank was run chiefly on 
deposits that were made by individuals. 

Q. Did the Western Railroad Company make their deposits 
in the bank of Jones & Lutterloh '. 

A. They did. 

Q. Did A. J. Jones, deposit in .your bank? 

A. lie did, and his account was kept in his individual name, 
and not as president of the road. 

Q. Will you state what was the amount of his deposits in 
the aggregate, and what time they commenced, and where 
they ended j 



1871-'72.] • Document No. 11. 171 

A. About $40,000, commencing November 13th, 1S69, at 
which time he made a deposit of $20,000; ending September 
10th, 1870, at which time a deposit of $5,000 was made. Of 
this sum lie has overdrawn to the amount of $11,000. 

Q. Do you know from what source these deposits came, 
and how much of them went to the use of the Western Kail- 
road ? 

A. I do not know the source from which they came, nor 
have I any means of showing from my books how much went 
to the use of the Western Railroad Company. 

Q. Have you any knowledge of the sale or application of the 
special tax bonds? 

A. None whatever. 

W. G. BROADFOOT. 

Sworn and subscribed before the Commission. 

John M. Rose being sworn, says: 

Q. Do you know anything about A. J. Jones' account 
against the Western Railroad Company? 

A. About the 21st February, 1871, at a meeting of the 
board of directors, he stated that he had disbursed about $55,000 
for the Western Railroad, and presented accounts for the same, 
and said he had vouchers to support the accounts, and stated 
that if the board would accept those vouchers as genuine, and 
credit him for them, he would turn them over, but unless 
the}' would do so, he would withdraw them. The board 
declined so to do. He stated that he would submit them to 
L. C. Jones and myself as individuals, not as officers of the 
railroad, and after examination, finding many we knew the 
board would not accept, we handed the bundle back. lie left 
copies of accounts against the company, but not the vouchers 
in support of them. T am the Secretary of the Western Rail- 
road Company. 

Q. Do you know anything relative to the sale or application 
of the special tax bonds '. 



s 



172 Document No. 11. • [Session 

A. I have no personal knowledge, nothing except from 

rumor. 

Q. Did yon know J. A. Hunt and N. E. Scales at tin- time 
thev took the contract for building the road '. If so, state their 
pecuniary condition \ 

A. I had known Scales from boyhood, but only became 
acquainted with Hunt when he came on to make the contract. 
Before making the contract I had seen their property adver- 
tised tor sale under attachment in one of the Western counties. 
I told A. J. Jones and two or three of the directors that I had 
seen these advertisements, and turther told them that I had in- 
quired about their solvency', and I thought they were insolvent. 
I insisted that they should not make the contract with them, as 
I represented the second largest stockholder in the company. 

JNG. M. lioSK. ' 

Sworn to aud subscribed before the commission. 

W. B. Stantox being sworn, says : 

Q. Were you a clerk of Jones Sc Worth in the year 1 869 '. If 
so, will you state whether or not A. J. Jones paid to Thomas 
J. Jones any sum of money, or whether any other person paid 
him large sums of money, what amount was paid, what time it 
was paid and what was done with it '. 

A. I was. I do not know of A. J. Jones paying any 
moneys into the establishment. Mr. T. S. Lutterloh delivers 1 
in my presence to Mr. T. J. Jones, twenty-five thousand dol- 
lars ($25,000). I made, or prepared to be made, the special 
deposit of the same money in the vault in the banking house 
of P. A. Wiley & Co., in Fayetteville, N. C. Do not recollect 
the date precisely, but some time during the month of August, 
lsGO. What was done with the money after its change from 
special deposit, I have no knowledge. 

(Signed) W. B. STANTON. 

Raleigh, May 1, 1871. 

Sworn to and subscribed before the commission. 



1871-'72.1 Document No. 11. 173 

Statement of JR. Y. McAden : 

R. Y. McAden states that during the summer of 1870, A. J. 
Jones, President of the Western Railroad Company, informed 
him that the stockholders and directors of his company desired 
to mortgage the road in order to raise money to complete the 
same ; that they desired three trustees, two in North Carolina 
and one in New York ; that Mr. Lutterloh, one of the direct- 
ors, not appointed by the State, but elected by the private 
stockholders, would be one trustee, that Mr. Utley would be 
another, and that he desired him to be another ; and that he 
desired him to be another because he was known m New 
York as the President of a bank, and could aid him in the 
sale of the bonds. He replied to him, that if the bonds were 
to be negotiated by responsible parties, and that if his stock- 
holders had a meeting and approved ot the mortgage, he 
would accept of the position as trustee with Messrs. Lutterloh 
and Utlev. 

That sometime in the fall of 1870, J. A. Hunt met him in 
New York and told him that he had partiallyagreed with A. 
J. Jones to build his road; that a mortgage would be made ; 
that the bonds would be given to him iu payment for his 
work ; that he desired him to be his financial agent to nego- 
tiate the bonds and negotiate loans for him, and that he 
would pay him the usual commission paid to brokers ; that 
he (McAden) told Hunt it the stockholders and directors would 
authorize the mortgage, and if he should be given the entire 
control of the negotiations of the bonds, he would become his 
financial agent. 

Some weeks after this he met Jones in Raleigh. Jones 
stated that the mortgage had been drawn up by Mr. Fuller, a 
lawyer ot tine reputation and citizen of Fayetteville ; that the 
mortgage was almost an exact copy of the mortgage made by 
the N. C. R. R. Co., which Mas drawn by Gov. Graham ; he, 
( McAden) examined the papers and found the resolution of 
the stockholders in meeting authorizing the mortgage ; also 
the contract between the railroad company and Hunt and 



174 Document No. 11. [Session 

Scales, approved by the directors and witnessed by L. C. Joi 
the present president of the company, the papers showing 
groat care in preparation and approved by the private st< 
holders, citizens oi Fayetteville, known to him and to the com- 
munity as men of character. Being satisfied that the mort- 
gage was correct, lie accepted the position as trustee. 

Before the mortgage was made, and at the time that Hunt 
asked him to become his financial agent, Hunt said he was 
going to Fayetteville with Jones to see the directors to make 
the contract to build the road ; that he desired at once to eo to 
Work ; that he wanted to go to Fayetteville in condition to 
place a large force upon the road ; that to do this and buy his 
provisions, tools and stock, he would want an advance of twenty 
thousand dollars ; that for the advance he would give McAden 
a draft on Jones, president, which draft was to be paid from 
the proceeds of the bonds when the mortgage was made. 
Hunt drew his draft on Jones, president, due 40 days after 
date, for twenty thousand dollars, for which McAden handed 
him, in the presence of Jones and others, twenty thousand 
dollars in currency of the denomination of one thousand, and 
five hundred dollar bills. Hunt ami Jones left New York the 
day of this transaction for Fayetteville. 

Some near sixty days after this transaction he met Jones, 
J hint and Lutterloh in New York, for the purpose of signing 
the usual certificates placed on mortgage bonds. lie learned 
from JJunt that he had been much delayed in his work by 
Jones not getting the bonds ready. He also learned from 
Hunt and Jones that they had selected one L. P. Bayne as 
their financial agent. McAden told Jones and Hunt that he 
had accepted the position ot trustee only on condition that he 
was to be the financial agent of Hunt and have the entire con- 
troFof the negotiation of the bonds ; that since they had selected 
another agent, if they would pay him the twenty thousand dol 
lars advanced, he would resign as trustee. This they both 
objected to, as it would create delay and trouble, and there was 
no way to pay him the twenty thousand dollars advanced, ex- 



1871-'72.] Document No. 11. 175 



cept by hypothecating the bonds. After a delay of two days, 
lie (McAden) consented to sign the certificate of the 900 bonds 
and become trustee on condition that the bonds were to be 
placed in a safety deposit compan} 7 , by Lutterloh and Rogers, 
two of the trustees, until Hunt and Jones had selected their 
financial agent. That he was to be repaid the twenty thousand 
advanced by him, and to be paid five bonds for his commissions 
as trustee, and his trouble in the matter. The bonds were 
taken possession of by Mr. Lutterloh and Rogers, and placed 
in vaults as agreed upon. The next day Hunt and Jones 
selected L. P. Bayne as financial agent, and placed the bonds 
in his possession. Hunt or Jones, he does not recollect which, 
gave him a draft on L. P. Bayne & Co., for twenty thousand 
dollars and interest, and hypothecating the bonds in Bayne's 
hands to secure the payment. The draft was accepted by L. 
P. Bayne & Co. When the draft became due it was not paid, 
Bayne informing him that he had given Lutterloh additional 
time to pay the draft ; Lutterloh giving him his notes as col- 
lateral for the draft, Bayne securing the debt to McAden and 
looking to Lutterloh and the bonds for his pay. 

As to when, or under what circumstances, Hunt transferred 
his claim to Lutterloh, he (McAden) knew nothing. He was 
not present at the transfer, and never heard of it until the 
draft was due in New York, and w r as not paid. He was then 
informed of the transfer by Bayne. lie (McAden) knew 
nothing about the contract of Hunt & Scales, except as appears 
in the written contract approved of by the directors and wit- 
nessed by L. C. Jones, the present president of the company. 
He does not know anything as to who was interested in any- 
way, directly or indirectly. He knows nothing as to the ad- 
ministration ot the affairs of the company by A. J. Jones. lie 
knows nothing, except rumors, as to the disposition by Jones 
of special tax bonds issued to the Western Railroad Company. 
He never saw one of them, and never had any connection with 
Jones, in any way, in negotiating bonds. 

The five bonds received by him from Jones he now has, and 



176 Document No. 11. [Session 

holds the same as his own property, Laving received the same 
legitimately, ami for services rendered, as provided tor in the 
mortgage. 

(Signed.) R. Y. MoADEN. 

Sworn to before me, W. M. Shipp, Chairman, &c, 

May 6th, 1871. 



Raleigh, Nov. 15th, 1871. 

Mr. 11. Y. McAdeH appeared again before the commission 
and was sworn and testified : 

Q. Do yon know, or have yon any information, that any 
money, bonds, proceeds of bonds, or anything of value, were 
given, offered or loaned to any member of the Convention or 
of the Legislature, or to any State official, or to any officer of 
a railroad in which the State has an interest, to influence his 
action in procuring the passage of any bill or ordinance 
through the Legislature or Convention, making appropria- 
tions to railroads or for any other purpose, or to influence his 
official action in any way whatever ? 

A. I used none myself for any such purposes. I know 
nothing except what was told me by Mr. Swepson and which 
is detailed in his testimony. It was generally understood 
here during the se? sion of lb68-'69, that no railroad appropria- 
tion could be made without being paid for. (Jen. Littlefield 
was generally understood to be the lobby member of the Leg- 
islature. 

Q. Were you not interested as the agent and attorney of 
the A. T. tvj (). E. R , to procure the passage of a bill through 
the Legislatme of 1S(!8-Y>9? If so, state whether through 
you or otherwise, any agreement was made with members of 
the Legislatiu < < r other persons, to pay bonds or a certain 
per cent, of the appropriations made to railroads, to procure 



1871-'72.] Document No. 11. ITT 

the passage through the Legislature of a bill making such an 
appropriation ? 

A- I was such agent and attorney for Col. Wm. Johnson, 
President of the A. T. & O. R. R. I paid no member of the 
Legislature for the passage of any bill and made no agree- 
ment to pay any member of the Legislature. 1 did not pay 
any money or any bonds to any one, except bonds paid to 
compromise the Kehoe injunction case. When the bill for 
the A. T. & O. E. R. was first introduced in the Legislature, 
I told Gen. Littlefield such bill would be introduced and 1 
desired his aid in its passage ; that I would pay him for hisr 
assistance in the passage of it as other railroads paid him. 
When the bills came up before the Legislature, Gen. Littlefield 
was not in Raleigh, he being absent, as was^suspected, to pre- 
vent being examined by the Sweet Committee. 

Q. Can you give the commission any more definite infor- 
mation in regard to the origin, prosecution and compromise- 
of the Kehoe injunction case than stated by you before the- 
Bragg Committee ? If so, state fully all the circumstances- 
connected with it. 

A. I am satisfied from the parties interested, and attendant 
circumstances, that the suit was brought as a blackmailing 
suit, but I cannot state any facts more particularly than 1 
stated before the Bragg Committee. 

Q. Do you know or not, whether G. W. Swepson had any 
connectkn with the institution or prosecution of this suit? 

A. I am satisfied he had no connection with it. He promised 
ine to do all he could to prevent it. 

Q. Has your attention been called to the testimony of M. S.. 
Littlefield, before the Bragg committee in reference to this 
suit* If so, state whether you delivered to him the 163 bonds; 
what instructions you gave him in reference to the disposition 
of the same, and all and any farther information you may have 
in reference to the final disposition of the said bonds? 

A. My attention has been called to Gen. Littlefield's testi- 
mony before the Bragg committee, I delivered to him the 163 

12 



17 s Document No. 11. [Session 

bonds as stated by me in my examination before the same com- 
mittee. I gave him no instruction as to the disposal of the 
bonds. I know that Littlefield sold 31 or 35 of them to a 
banking house in New York. The way 1 know it is, that the 
bonds uere not a good delivery on the stock exchange, and the 
banker brought suit against Littlefield, for selling him bonds 
that were not a good delivery. His testimony in reference to 
instructions as to delivery of bonds to Swepsoif is fa lse. I 
heard. Deweese say he got a part of these 103 bonds. I do not 
know how Littlefield disposed of the remaining bonds. I 
bought from Fuller, Treat and Cox, in the city of New York 
41 of tiie bonds which were a part of the 103. I bought them 
because they were being offered in the market at less rates than 
an}' North Carolina bonds, and this was affecting the credit of 
the whole issue. The reason they were offered at a less price. 
was that they had not been declared a good delivery by the 
stock exchange. I paid 40 cts. on the dollar, stock call, for them 
and exchanged them immediately afterwards with Swepson for 
W. N. C. It. It., bonds, which I sold for 45 seats. I do nof 
know what further disposition was made of the 103 bond.-. 
except in so far as above Stated. 

Q. Do you remember of lending to (i. W. Swepson 2<> of 
these bonds, and if so, slate the circumstances '. 

A. The bonds in my possession were hypothecated with 
bankers in New York as stated in my examination before the 
Bragg committee, all of which bonds were returned to me by 
the bankers except 20. These 20 were afterwards returned to 
me by Gr. W. Swepson, he having given his order on the 
banker to deliver 20 of the bonds of the A. T. & O. 11. R. to 
Wm. Sloan. In all my connection with the A. T. <V; O. R. R. 
I acted as agent and attorney of Wm. Johnson, President of 
the road, and under his instructions. 

Q. Do you know anything about a pool formed in the city 
of New York, by the Railroad Presidents and others from 
North Carolina in 18G0? It so, give fully all the information 
y< u can in reference to the matter, and any other information 



1871-72.] Document No. 11. 170 

in reference to speculation in special tax bonds, in 1869 or 
1S70. 

A. I saw an agreement in writing entered into in New York 
in 1SG9, between G. W. Swepson, A. J. Jones, M. S. Little- 
field, William Sloan, and others, names not recollected. The 
agreement was to cany a large amount of State bonds alread}- 
purchased ; to purchase other bonds, and not sell them, unless 
sold by the pool, and when sold, the parties to share the losses 
and gains according to their respective interests in the pool. 
The cbject of this pool or agreement was to bull the State 
bonds, or in other words, to corner parties in New York who 
were endeavoring to break down the credit of the bonds. 
This agreement had every prospect of success until the gold 
panic came on, when all bonds and stock went down, and in 
the general crash the bonds went down, and the pool lost very 
heavily — several hundred thousand dollars. In order to pur- 
chase these bonds, I understood the Railroad Presidents 
pledged the bonds belonging to their roads as collaterals. 
Sloan not having received his bonds, put up no collaterals, his 
collaterals being provided for b} T A. J. Jones. I had no inter- 
est in this pool, or connection with it. I did purchase and sell 
bonds, but did so on my own private account, and paid losses 
with my own money. I was no Railroad officer and held no 
office under the State government. 

Q. Do you know whether these Presidents accounted to 
their roads respectively for these losses, and whether these 
speculations were entered into for the benefit of their roads, or 
for their private individual advantage? 

A. I know nothing of the accounts between the Presidents 
and their roads. My understanding was, that the pool was on 
their private account and for their individual advantage. 

Q. Do you know how A. J. Jones, President of the West- 
ern Railroad, disposed of his bonds, or have you any informa- 
tion about them ? 

A. I do not. 

Q. Can you give the Commission any information of the 



180 Document No. 11. [Session 

investments made by (J. W. Swepson of tlie bonds issued to 
him as President of the Western North Carolina Railroad 
Company '. 

A. I know nothing connected with it. 

Q. Have you ever had any connection or interest with < r. 
W. Swepson in his speculations or investments, in Railroad 
bonds '( 

A. I have never had any connection or any interest with him 
as to bond speculations or investments, except a purchase and 
sale of one hundred bonds in New York, in which transaction 
Swepson, Dewey and myself were equally interested, a state, 
ment of which, I understand, has been given by Mr. Dewey to 
this Commission. 

Q. Have you any knowledge of the organization, contracts or 
other matters connected with the Western Division of the 
Western North Carolina Railroad ? 

A. I have none, except what I saw in the newspapers, and 
the proceedings of the stockholders. I never had any contract 
or interest, in any way, in either the Eastern or Western Di- 
vision of the road, and never attended a meeting of the stock- 
holders. 

Q. Do you know under what circumstances the bonds issued 
to the Western North Carolina Railroad were obtained by Gf 
W. Swepson, President thereof, and upon what certificates! 
How the same were made, and give all the information you pos- 
sess on the subject ( 

A. I do not. I had no connection or interest whatever in 
his railroad matters, and have no information on the subject. 

Q. Have you any knowledge or information of the connec- 
tion ot Mr. Porter, of New York, with these railroad appro, 
priations, or his connection with the University Railroad case? 

A. T know that Mr. Porter was sent from the city ot New 
Fork to Raleigh during the time the suit was pending before 
the Supreme Court, lb' was sent, as 1 understand, by the 
Presidents of the railroads. I saw Mr. Porter in Raleigh, both 
during the session of the Convention and of the Legislature. 



1871-'72.] Document No. 11. 181 

He seemed to lie very active in lobbying to get certain bills 
through these bodies, appropriating bonds to various railroads. 
I know nothing of his private negotiations with members, nor 
of what he did in the University Railroad case. 

Q. Can 3 r ou give any further information you may have 
connected with the objects of this investigation? 

A. I know nothing that I can now recall further than what 
I stated before the Bragg Committee and this Commission. 
It anything occurs to me, I will state it cheerfully. 

R. Y. McADEK 

Sworn to and subscribed before the Commission. 



Raleigh, Nov. 11th, 1871. 

Mr. A. J. Jones appeared before the Commission and was duly 
sworn and testified : 

Q. "What connection have you had with the Western Rail- 
road Company, heretofore, and what are your present relations 
to that Company ? 

A. I was President of the Company for two years, nearly, 
having been elected, I think, in April. 1869. I have now no 
official connection with it, except as stockholder. 

Q. Do you know of any money, bonds, proceeds of bonds or 
anything of value having been given, offered, or loaned to any 
member of the Convention or Legislature, or to any State 
official, or to an} 7 officer of a Railroad in which the State has 
an interest, to influence them in procuring the passage of any 
bill or ordinance making appropriations to Railroads through 
either of those bodies, or for other purposes, or to influence 
their legislative or official action in any way whatever? 

A. 1 know nothing of the kind beyond general rumors. I 
was a member of the Legislature, taking my seat in February, 
1S69, to fill the unexpired term of Mr. Purdy, of Bladen. At 



182 Document No. 11. [Session 

that time a large portion of the appropriations to Railroads had 
been made. 

Q. As President of the Western Railroad, how many bonds 

did you receive from the State of North Carolina, which were 
appropriated to your road 3 

A. I received 1,320. The appropriation was $1,500,000, 
less $180,000 retained in the Public Treasury to meet interest, 
iV.'c. For five hundred of these bonds the Western Railroad 
surrendered live hundred of the second mortgage bonds ot the 
Wilmington, Charlotte & Rutherford Railroad. 

Q. Please state as fully as you can, to the best uf your infor- 
mation, what disposition has been made of those bonds, by 
yourself and other officers ot the company '. 

A. A criminal prosecution is now pending against me in the 
Superior Court of Moore county, for refusing to account with 
my successors in office for the proceeds of these bonds ; also 
another indictment in the county of Cumberland for conspiring 
to defraud the road, and I am advised by my counsel thtst any 
answers I may make to this question will furnish evidence 
against me in the trial of those cases, and that, therefore, I am 
not compelled to criminate myself, and that I cannot answer 
without doing so, and hope the Committee will excuse me. 

(At this point of the examination Mr. Jones retired from the 
Committee room to allow the members of the Commission an 
opportunity tor consultation. After consultation and examin- 
ation of authorities, the Commission were of opinion that the 
witness was entitled to the exemption claimed.) 

Mr. Jones was recalled and the examination resumed : 

Q. Do you know of any agreement or understanding be- 
tween Littlefield and Deweese, or other parties, with the 
various railroad presidents, or any of them, by which the for- 
mer were to receive LO per cent, in kind oi all the bonds issued 
on account of railroad appropriations, in consideration of ser- 
vices rendered in procuring the passage of bills for such pur- 
poses through the Legislature I 

A. I do not, and have no information on the subject. 



1871-72.] Document No. 11. 183 

Q. State fully all the circumstances connected with the 
making of the mortgage of the W. R. R. for $900,000. 

A. Before my administration the company was authorized 
by the provisions of the charter, to execute a mortgage on all 
its property and effects for the sum of §900,000, for the com- 
pletion of the road, which mortgage was authorized by the 
stockholders in general meeting to be executed. This was at 
the annual meeting in April 1870. This mortgage was drawn 
up by my attorney, Messrs. Fuller, and the present President 
ot the road, Mr. L. C. Jones was witness, I believe, and was 
for $900,000. Under it, Mr. R. Y. McAdcn, T. S. Lutterloh 
and Maj. Rogers were appointed trustees, and the mortgage 
was duly rrcorded in the courts of Cumberland, which will ap- 
pear by the records of said county. The bonds were issued to 
the amount above stated, in accordance with the provisions of 
the mortgage, and were placed in the hands of Mr. Lutterloh, 
as one of said trustees. I selected Mr. Lutterloh as trustee, 
because I thought the community in which he lived had con- 
fidence in him, and I chose Mr. McAden, because I thought 
he would be of great assistance in negotiating the bonds. And 
I selected Mr. Rogers, both on account of my belief in his com- 
petency and because he was a resident of New York, and it is 
the usual custom to select a trustee in the city, from the aid 
obtained in transactions on the stock board. About the time the 
mortgage was executed, Mr. McAden advanced to John A. 
Hunt a contractor, the sum of $20,000. Mr. McAdeus testi- 
mony bearing upon this transaction, has been submitted tome, 
and it is in the main correct, and I adopt it as my answer to 
the rest of this question. I have since learned that Mr. Lut- 
terloh has obtained possession ot 460 of these bonds, and has 
returned them to the company. Of these bonds, I gave to the 
trustees 5 each, making 15 in all. I objected to doing so until 
the cpestion was submitted to parties in New York, brokers, 
and they decided that it was the usual custom in such cases, 
and I yielded. The trustees have agreed to surrender these 
bonds to me, in consideration of the payment of a certain sum 



L84 Document No. 11. [Session 

by me, provided a compromise which has been agreed upon 
between me and the officers of the company can bo effected. 
All that I have ever realized from these bonds is the above 
$20,000. 

Q. Did you have any interest in the contract with Hunt & 
Co., for building the road from Egypt to Greensboro? 

A. I did not have. There was so far as I know no one else 
in the contract besides Hunt 6c Scales. 

Q. Do you know whether Gr. W. Swepson had any interest 
in the contract \ 

A. I do not know that he had. 

Q. Give the Commission all the information you can rela- 
tive to the contract with J. A. Hunt cv; Co. \ 

A. I made a contract with them which is now on tile in the 
-office ot the Western Railroad Company. After duly submit- 
ting this proposition for said contract, accompanied by other 
bids. And I thought upon examination of them all that that 
was the best that could be done for said Company. "Where- 
upon said contract was entered into with II. 6c S., work imme- 
diately commenced, the prices having been corrected, esti- 
mated and agreed upon by the chiet engineer, L. C. Jones, and 
.a committee appointed by the Board of Directors and the 
President. 

Q. J) id nut Hunt and Seales obtain the contract at higher 
prices than were offered by Martindale & Co., L. J. llaughton 
and others i If so, in what particulars, and why was the 
difference made in their favor? 

A. They may have received the contract, being prepared 
with teams, tools and everything necessary to go on with the 
work immediately, at a higher price than Martindale & Co.. 
who, I was not aware, were either responsible or railroad men. 
So far as Mr. Haughton's bid is concerned, the price received 
by Hunt & Scales was some higher, he (llaughton) bidding 
for cash, and only for a portion of the road, while Hunt & 
Scales made their bids tor bonds and for the whole road. 
Dranc & McDowell's bid being equally as high, was not re- 



1871-72.] Document No. 11. 185 

ceived for the reason that II. M. Drane was a former partner 
of my own, and it might be supposed should I have accepted 
their bid, that I might also still be considered a partner in such 
contract. 

Q. Were you acquainted with the pecuniary condition of 
Hunt & Scales at that time, and did you know that they were 
insolvent \ 

A. I was not acquainted with their pecuniary condition, 
neither did I know they were insolvent. 

Q. How much work was done by Hunt <k Scales on the 
road ? "Was it near the amount of the advance ? 

A. I cannot answer because the work was not estimated. 
They worked between two and three months. I do not think 
the work was near the amount of the advancement. 

Q. Can you give any information about the assignment of 
the contract to T. S. Lutterloh ? 

A. Nothing more than that the papers were handed to me 
and the contract said to be legally drawn. I know nothing 
of the consideration of the assignment. 

Q. Will you state why the contract was changed soon after 
it came into the hands of Lutterloh, so that he got possession 
of all the mortgage bonds, and whether there was any under- 
standing between you and him in regard to the management 
and disposition of these bonds, by which you were to derive 
any advantage from the sale or issue of .them ? 

A. There was no understanding between him and me 
whereby I was to be benefitted, and if modified or changed, 
there was no purpose of injury or particular benefit to said 
Western road or to said contractor. 

Q. Do you know anything about the case known as the 
University Railroad suit, and how much money was paid or 
promised by the W. R. R., or any other road, in that matter \ 
If so, state fully all you know about it. 

A. I know nothing except by hearsay. No amount Mas 
promised that I recollect or know of by the W. R. R., or any 
of its officers, and am certain that no bonds or money of said 



L86 Document No. 11. [Session 

road was paid in said suit, excepl $250 paid to Col. Hinsdale 
by me to look after tin- interests of my company in said suit. 
I never had any bargain or contract of any sort with Porter 
for any amount of bonds or money, to be paid by him as agent 
for me, that I recollect of. I saw Judge Person as he was 
on the point of leaving New York, and asked him to look after 
the interests of my road in the event that it should require 
legal attention. I saw him but few times afterwards, and 
had no conversation with him on the subject. 

Q. Did you belong to a pool or ring in the city of New 
York, composed of the various railroad Presidents from North 
Carolina, for the purpose of buying and selling State bonds ? 
If so, give the commission such information of what you 
know with reference to its operations and who were the mem- 
bers thereof? 

A. There was a party of gentlemen, some railroad Pres- 
idents and others, private individuals, who were buying bonds. 
The names of all the parties at present I do not recollect, but 
the object of the Presidents was to try to keep the bonds up, 
as stated to me. There was an article of agreement in 
writing drawn up, having that object in view, which was 
signed by myself, Swepson, I think Sloan, and others whom I 
cannot recall. So far as the making of money by their opera- 
tions is concerned, all, or at any rate, a part of them, lost a 
great deal of money. 1 might say from three to four hundred 
thousand dollars to my knowledge. 

Part of the loss, say $280,000, ought to have been divided 
eqnally between about four parties. The remaining portion 
among a larger number, those four and some others. Accord- 
ing to an arrangemeut G-. W. Swepson, M. S. Littlefield, Dr. 
Sloan and myself were the four among whom the $280,000 
Joss was to be divided. 1 do not know all who were implicated 
in the balance of the loss. I paid np my portion of the losses. 
Dr. Sloan did not pay his, and I afterwards had to arrange it. 
Swepson paid his part and a part of Littlefield's, and gave his 
draft on Littlefield for the remaining portion. 



1871-'72.] Document No. 11. 187 

Q. When did you receive the special tax bonds for your road 
from the Treasurer of the State? 

A. I received them, as nearly as I recollect, on the 22d day 
of Juue, 1860. 

Q. Did you have those bonds in your possession at the time 
you made this agreement with these gentlemen ? 

A. I did. 

Q. How did this association make their purchases ? Whether 
by putting up margins or how, and if by margins, how were the 
margins put up ? 

A. They were purchased by margins, put up in different 
ways by the parties, some in cash and some in bonds. 

Q. Did you put up the margins for the bonds in your road ? 

A. My agents may have clone so or not. The agents were 
tltley tfc Dougherty, bankers, &c. I do not know certainly. 

Q. Did you have any settlement with your agents afterwards 
so as to ascertain whether the margins were put up in bonds or 
cash ? 

A. I did have a settlement afterwards. I do not recollect 
whether any ot the bonds put up as a margin were those of my 
road. 

Q. Will you state to the commission fully to the best of your 
recollection what disposition was made of the bonds of the 
Western Road at that time in your possession ? 

A. A tew were sold. The remaining portion I hold the 
e c eipt tor, as will appear in the Bragg report. 

Q. What has become of the receipts of which you speak in 
your answer to the Bragg committee? 

A. They were delivered to the parties who gave them. 

Q. Did you have a final settlement with the parties when 
you gave them up those receipts? 

A. I think I did. 

Q. Have you accounted to your company for the proceeds of 
this settlement with your agents in Xew York ? 

A. I now stand indicted under a so-called act of the last 
General Assembly for, as the company states, that I failed t 



1SS Document No. 11. [Session 

account for these proceeds. I claim, in my opinion, that I 
have offered to account to the company for all the proceeds 
that I had a right to as the property of the Western road. I 
made a statement of such matters, except as connected with 
the special tax bonds. There has no formal final settlement. 

Q. "Will you please state why you have not accounted with 
or made a statement to the company on account of these spe- 
cial tax bonds ? 

A. I decline to answer this question for reasons assigned in 
this deposition to another question bearing upon the same 
point; that is to say, because 1 think it would furnish evidence 
against me, and tend to criminate me in suits now pending. 

Q. What interest have you in the banking house of Jones 
& Lutterloh ? 

A. None whatever, except as a depositor. 

Q Do you not know that that banking house operated prin- 
cipally upon the deposits of the Western road, and did you 
derive any profits individually from the business of the house? 

A. I do not know that it did, and have not received, nor do 
I expect to receive, any profit whatever upon those deposits. 

Q. Did you furnish the capital to T. J. Jones to engage in 
the banking business ? 

A. I furnished no capital to him or their bank, except as a 
depositor. 

Q. Was there any special agreement between you and Jones 
<fc Lutterloh as regards your deposits as railroad President i 
Were they to pay any interest, and if so, for whose benefit ? 

A. There was no agreement between them and me for any 
rate of interest, as it is not the custom, to my knowledge, for 
the banks in that place to allow interest on deposits. They 
paid me no interest for my own benefit, or that of any one 
else. 

Q. Were you to have any interest in the contract on the 
Western Division of the Western North Carolina Railroad 
which was made, or to be made, with Drane & McDowell ' 



1871-'72.] Document No. 11. 189 

A. If they had have received the contract I was to have had 
an equal interest with them. 

Q. Do you know of any other matters connected with the 
subjects of this investigation of which you can give the Com- 
mission any information ? 

A. I do not know of anything that I can now recal upon 
which I can give information. 

A. J. JONES. 

Sworn to and subscribed before the Commission. 



APPENDIX TO W T ESTEKN KAILROAD. 

The following is an interrogatory propounded to Tod R. 
Caldwell, by the investigating committee, of which Hon. W. 
M. Shipp is chairman, and his answer thereto. 

Q. Do you know the pecuniary condition of J. A. Hunt and 
Nathaniel Scales previous to October, 1870? If so, state all 
you know about the matter. 

A. I knew John A. Hunt and N. E. Scales previous to 
October, 1870. They were contractors on the Western N. C. 
Railroad. They had a contract in Burke county, which -was 
reported to have proved disastrous to them. I had some debts 
as an attorney to collect off of John A. Hunt & Co., amount- 
ing in the aggregate probably to $1,200 or $1,500. These, 
according to my recollection, were paid without suit. A 6hort 
ime before Hunt ife Scales left North Carolina to go to Ala- 
bama, Hunt told me that "he was broke." I have no per- 
sonal knowledge of the financial condition of the parties further 
than is above stated. It was currently reported and believed 
in Burke county that the firm of John A. Hunt & Co. was in- 
solvent. My understanding was that John A. Hunt and N. E. 
Scales composed the firm of John A. Hunt & Co. 

TOD B. CALDWELL. 

Raleigh, May 11th, 1871. 



100 



Document No. 11. 



! Session 



STATEMENT 

Of Account of Andrew J. Joins, President, with Western 
Railroad, as shown by the Boohs <>f the Company. 





DEBTOE. 










1 369. 












May, 31, 


To cash ol J. II. Davi>, 
To cash placed to credit of 


s 77 










C. B. Mallett, per order. 


187 


50 


* 264 
238 


50 
60 


July, 


To cash ol J. 11. Davis, 






is 70. 












April, 29, 


To cash paid Overbaugh, 






85 


50 


Mav, 21, 


To cash of J. II. Davis. 






187 




June, 30,i 


To cash paid Overbaugh, 

To cash Folk, 

To cash Iieilev, 

To cash of J. II. Davis, 


50 
50 

So 


L5 














■j 7:. 


'• 


August, 


To cash of J. II. Davis, 






< )c tuber, 


To cash ot J. 11. Davis, 










Dec. 


To cash of J. II. Davjs, 






60 


Jan. 1. 


To pash ol' J. II. Davisi 
To each uf J. II. lb 






100 


Jan. 16, 






L50 






1,435 


T5 




Balance remaing t<> credit 








of A. J. Jones, Presi- 










dent, on the books of 












the company. 






•_':>399 


29 




s 86,828 


H 



1869. 



CREDITS. 



By Balary from Sept. 1st, 
1869, to Nov. 1st, isti'.'. 
7 months, 208.34 per 
month, 



I 



l,l> 



1871-'72.] 



Document No. 11. 



191 



STATEMENT— (Continued.) 



1869. 


Amt. brt. forward, 






$ 1,458 


33 


Nov. 13, 


By cash paid to J. II. 
Davis, 


% 2,000 








Nov. 29, 


By cash paid to J. II. [ 
Davis, 


soo 




2,800 
208 






By salary for November, 






34 


Dec. 6, 


By cash paid J. H. Davis, 


1,500 








Dec. 11, 


By cash paid J. II. Davis, 


1,000 




2,500 
208 






By salary for December, 






34 


1870. 












Jan. 


By cash paid J. II. Davis, 






350 






By salary for January, 






208 


34 


Feb. 16, 


By cash paid J. 11. Davis, 






1,500 






By salary for February, 






20S 


34 


March, 5, 


By cash paid J. II. Davis, 


350 








" 16, 


By cash paid J. H. Davis, 


1,000 




1 350 






By salary for March, 






X • Ks *J V 

208 


33 


April, 1, 


By cash paid J. II. Davis, 


500 








" 9, 


a (( a u 


1,000 








« 12, 


a a a u 


970 


15 






" 18, 


a « a a 


300 








" 22, 


<< u a a 


350 








« 9Q 


u a (( a 


1,500 




4,620 

208 


45 
34 




" Salary tor April, 






May, 11, 


" Cash paid J. H. Davis. 


125 








" 31, 


a u a it 


1,200 




1,325 
20S 






" Salary for May, 






32 


June, 30, 


" Cash paid J. II. Davis, 






1,700 






" Salary for June, 






208 


32 


July, 


" Cash paid J. 11. Davis, 






1,500 






" Salary for July, 






20S 


32 


August, 


" Cash paid J. II. Davis, 


1,350 
1,350 




2,700 




















* 23,6 7S 


77 



L92 



!>"< IMINT NO. 11. 



[Seesi'»n 



STATEMENT— (Qmtmued.) 



L870. 


A nit. brt. forward, 












$ 00,00< 


Aug 


By Salary for August, 




208 - 


Sept. 


" " September. 




20- . 


Oct. 


■• ( ';:sh paid Davis, 




100 






" Salary for October, 






208 32 


Nov. 


" " November, 

'' Cash paid J. II. Davis. 






208 32 
1,800 


Dec. 


" Salary, 






208 32 


Jan. 


m a 






208 


32 

_ 

69 




$ 20,828 




RECAPITULATION. 












The foregoirjg acct shows 












that A. J. Jones paid 












into the Treasury of the 












Railroad Company, 






22,245 54 




Withdrawn therefrom, 
Leaving a balance of cash, 






1,435 


75 
79 




20,809 




Received credit lor salary 












amounting to the sum 












of 
And leaving a net balance 






4,583 29 








to his credit of 






$ 25,30:: 



1871-'72.] Document No. 11. 19,5 

STATE OF NORTH CAROLINA, 

Cumberland County. 

Jno. M. Rose, maketh oath that he is Secretary of the Wes- 
tern Railroad Company, and as snch, has in charge the hooks 
of said company, that the foregoing is a true transcript of the 
account of Andrew J. Jones, President, during his term of 
office as shown by said books. That said Jones is shown, to 
have paid into the treasury of the company, in cash, twenty- 
two thousand two hundred and forty-five dollars and forty five 
cents, and to have withdrawn therefrom fourteen hundred and 
thirty -five dollars and seventy-five cents, leaving a net balance 
of cash, twenty thousand three hundred and nine dollars and 
seventy cents, and also received credit for four thousand five 
hundred and eighty-three dollars and twenty-nine cents, and 
leaving a total amount to his credit of twenty-five thousand 
three hundred and ninety-two dollars and ninety-nine cents, 
and that no charge has been made against him for sale of State 
special tax or mortgage bonds. 

JNO. M. ROSE. 

Sworn to. 

May 5, 1871. 

W. Whitehead, Justice of the Peace. 



13 



194 



Document No. 11. 



[Session 



Mr. J. II. Darl?, Treasurer Western Railroad, 

To A. J. Jones, President West* m Rath 



1869, 












Nov. 


15th. 


To Check, 


* 


2000 




Nov. 


30th, 


u a 




.N.HI 




Dec. 


6th, 


ft ft 




1500 




Dec. 


24th, 


u a 




400 




1ST0 












Jan. 


4th, 


a a 




350 




Feb. 


19th, 


a u 




1500 




April 


9th, 


a a 




1000 




April 


22d, 


a a 




350 




May 


18th, 


U H 




125 




Jnnc 


1st. 


a a 




1200 




July 


2d, 


a a 




1700 




Aug. 


1ft, 


u a 




15(X) 




Sept. 


5th, 


a a 




1350 




Sept. 


6th, 


a a 




1350 




Oct. 


4 th, 


it a 




1S0O 




Nov. 


2d, 


u (( 




1S00 




Dec. 


1st, 


a a 




1200 




1871 












Jan. 


20th,, 


(C C( 




1500 






Check toW. B. Wright, April 12th, 












1870, for execution. 


i 


'.'70 


45 




$ 


22395 


45 






Salary as president up to 1st Feb., 










i 


1871, 




45S3 


29 




* 


26978 


71 






Cr. by and paid me by Trca. 




1435 


75 




* 


25542 


99 



1871-72.] 



Document No. 11. 



195 



A. J. Jones in account with Western Railroad Company. 



To amount money furnished the 

Treasurer, 
Am'ts. paid on vouchers accomnanying 


25532 
29473 


99 
59 


Cr. 

By nett sales, 55 bonds, $ 20894 13 
Collections coupons, 20300 00 


% 


55016 
51193 


58 
13 


• 


Balance due A. J. Jones, 


% 


3823 


45 



196 Document No. 11. [Session 



WESTERN NORTH CAROLINA RAILROAD, WEST- 
ERN DIVISION. 

Kalku.ii, May 10, 1871. 

Geo. W. Swepson being sworn, testified : 

Q. Were you one of the stockholders of the Deep River 
Manufacturing Company at the time of the sale of the Lock- 
ville property to the State ' 

A. I was. 

Q. Who were the stockholders '. 

A. J. M. Heck, A. B. Andrews, myself, and Littlefield had 
at the time the privilege of taking a fourth interest in it by 
paying the sum I did. To my knowledge there was no other 
stockholder. I paid a little over $12,000 for my part. Little- 
field told me he had paid his part. 

Q. State, if you remember, the capital stock of the company, 
when it was organized, and what was its object, and who were 
the original owners of the property ? 

A. I do not remember what the original capital stock was. 
I do not remember when it was organized, but certainly previ- 
ous to the sale. The object was to put the river in order, 
repair locks and dams, carry freights and sell out water power. 
Col. Heck, Clegg and Bryan, and the Chatham Railroad Com- 
pany were the original proprietors. 

Q. Do you know anything of the sale of the Lockville 
property and other tracts of lands known as the 8,000 acres, 
lying on Deep River, or Cape Fear, to the State ? If so, give 
the committee all the information you have on the subject. 

A. Col. Heck, as president of the company, had the sole 
management and control of the Lockville property. He told 
me he was anxious that the penitentiary should be located at 
that place. He had, at the time of the negotiation for the 
sale of the 8,000 acres, a contract with the owners of that 
property, and had a certain time in which to comply with it.- 



1871-72.] Document No. 11. 197 

terms. Ho told me on several occasions in the bank that he 
would not comply with the contract unless he could make the 
sale to Prnyu. I understood that the trade about the Lock- 
ville property and the S,000 acres was one transaction. He 
had the contract on the 8,000 acres for the benefit of the com- 
pany. I do not remember what price he was to pay for the 
8,000 acres. 

Q. Did you have any conversation with Pruyn, and do you 
know what interest he had in the sale or purchase of the S,000 
acres ? 

A. I never had any conversation with him on that subject. 
All I know about his interest is that he bought for 56 bonds 
and sold for 100. I do not know whether or not there was 
anv understanding between him and Heck. 

Q. Did you have any negotiation or conversation with any 
member of the penitentiary committee in regard to the sale of 
these lands, or with Littlefield ? If so, state all you know 
about it. 

A. Never, to my recollection, with any member of it. Nor 
within my knowledge did Gen. M. S. Littlefield ever have 
any connection with negotiations for the sale of this property. 

Q. Do you know what became of the^56 bonds that were 
paid to Col. Heck ? 

A. Col. Heck told me he sold them to J. G. Williams very 
soon after he got them, for $28,000 or $29,000, and that 
Williams took them at his own risk. 

Q. Do you know what became of the $28,000 paid to Heck 
for these bonds ? 

A. Col. Heck received it and told me had paid out a por- 
tion of it for the 8,000 acres. I do not know what he did 
with the balance. I transferred my interest in the corpora- 
tion to M. S. Littlefield in 1S69, and he sold it, as I under- 
stand, to my brother. Littlefield conveyed his own interest, 
as well as that he got from me, to my brother. 

Q. Do you know whether any of these bonds, or the pro- 
ceeds of them, or money, or other things of value, were given 



198 Document No. 11. [Session 

to any member of the Penitentiary committee to influence 
their action in the selection of a site '? 

A. I do not, and have no knowledge on the subject except 
from floating rumors. 

Q. Do you know what became of the 44 bonds received by 
Pruyn from the State ? 

A. I never saw any of them in the possession of Pruyn or 
any one else. I do not know what became of them. Pruyn 
told me in New York some'few months ago, that he had the 
44 Penitentiary bonds and offered to sell them to me at 5 
cents in the dollar. 

Q. Do you know anything about the appointment of the 
Penitentiary committee, and at whose instance the different 
members of it were selected ? 

A. I know nothing about it. 

Q. Do you know anything about the contract made between 
the commissioners and Pruyn ffcr the erection of the stockade 
at Lockvllle ? 

A. Nothing except that I heard he had a contract at a good 
price. I was asked to go his security for its performance and 
did so. and I also understood he was to receive, and did 
receive, an advance of $5,000 from the State Treasurer to 
carry on the work. He did some work under the contract 
and got out a large amount of timber. No part of the $5,000 
advanced has ever been, to my knowledge, refunded to the 
State. I understood afterwards from Col. Heck, that all the 
timber was taken by him on account of a del it due by Pruyn 
to the Peep River Company. 

Q. Do you that any one else was interested with Pruyn in 
this contract ? Tf so, state who. 

A. I do not. Upon reflection, I remember that Ilyman, 
one of the Penitentiary committee, did bring an order tome, 
at what particular time I do not remember, from Littlefield, 
which I paid. Downing, another member of the committee, 
presented^ a similar order, which I did not pay. This was 
sometime afterwards. 



1871-'72.] Document No. 11. 199- 

Q. Do you know any reason why Heck did not negotiate 
directly with the commissioners, instead of through the 
medium of Prnyn ? 

A. I do not know. I remember nothing else at present in 
connection with this subject. If any thing else occurs to me 
I will state it to the commissioners. 

Q. Did you purchase from the Treasurer of the State, cer- 
tain bonds of the North Carolina Railroad Company \ If so, 
state at what time, and under what circumstances you bought 
them ? 

A. I did purchase from the Treasurer of the State $176,000 
of bonds of the North Carolina Railroad Company, in the year 
1868, on the 11th of November. I was in the city of New 
York, when the advertisement of the sale of these bonds was 
called to my attention. I came to Raleigh on the evening of 
the day before the sale advertised. Col. Heck came into the 
bank and proposed to make up a party to buy up the bonds, 
saying that 60 cents would buy them as there was not many 
persons here to bid. He thought that J. G. Williams, a banker 
in this city, would join with us. I made no arrangement with 
him. I pat in my bid the next day, between 12 and 1 o'clock, 
at 65 cents for the whole, or any part of the bonds not bid for 
at a higher rate. That evening at supper, at the Yarborough 
House, the Treasurer, Mr. Jenkins, told me my bid was the 
highest, except for §4,000. lie then, that night after some 
conversation, delivered me the bonds in the Raleigh National 
Rank, and I settled for them. 

Q. Was there any one else interested with you in the pur- 
chase of these bonds ? If so, state who. 

A. Col. Tate (S. Mc. D.) was interested with me. x\fter the 
bid was accepted, we agreed to let Dr. Hawkins have some. 
I do not know how many. Col. Tate was equally, interested 
with vTiC. My impression is that we did let Dr. Hawkins have 
$30,000 at cost. There was no one else interested. Col. Tate 
and I agreed in the city of New York to purchase these bonds 
and he came to Raleigh a day or two before-hand, to be on the 



u 2<><"> Document No. 11. [Session 

ground, and met me here. We regarded the investment as a 
good one and were apprehensive that other parties might be 
here to bid for them. We agreed to put in a bid at G5 eents, 
but were determined to bid TO cents, to secure the purchase. 

Q. Did you have any private conversation or communica- 
tion with the Treasurer or Gov. Ilolden previous to your bid \ 

A. I had none with the Treasurer. I went into Gov. Iloldens 
office, and asked him what he thought these bonds were worth i 
lie said he thought they were worth as much as old State 
bonds, which were worth in New York, between G4 and G5 
cents. 

Q. Did the treasurer, or the clerks of the department or the 
Governor tell you what bids had been put in ? 

A. Mr. Jenkins told me there were several bids in, but told 
nothing of the offers. Alter 1 had bought them, several days 
alter, 1 proposed to let Gov. Ilolden have $25,000 at cost, and 
also Mr. Jenkins $10,000 at same. Gov. Ilolden said he would 
be glad to have them, considering it a good investment, but as 
they were sold by the State, he would have nothing to do with 
them. Mr. Jenkins also declined taking any. Neither of them 
so far a.s I know ever bought any of these bonds. 

Q. Can you tell to whom you sold these bonds and at what 
prices \ 

A. I cannot tell now to all the persons to whom I sold these 
bonds. My impression is, that a few of them sold at 90 cents, 
most ot them Irom 75 to 85 cents. 

Q. Did you ever divide the profits of these sales with any 
one I If so, with whom ? 

A. I did not divide the profits with any one whatever. I 
bought Dr. Hawkins's part back at a small advance. Col. 
Tate sold his in New York at about 75 cents. 

Q. Did the treasurer advertise the sale of these bonds in 
any paper out of the State, to your knowledge '. 

A. No. 1 never saw the advertisement in any other than 
the papers of Raleigh. In the purchase of these bonds I ad- 
vanced all the money to pay fur them. When I let Col. Tate 



1871-'72.] Document No. 11. 201 

take his portion of them, he paid me about 69 cents on the 
dollar for them. 

Q. Were you interested iu the passage of any bills making 
appropriations to railroad companies through the Legislature 
in the year 1868-'60, or the passage of any ordinance through 
the Convention for a similar purpose ? 

A. I was interested personally in the passage of the bill 
through the Legislature, making an appropriation to the "Wes- 
tern N. C. Railroad. 

Q* Were there any bonds, or proceeds of bonds, or money 
used to procure the passage of any ordinance or bill through 
the Convention or Legislature ? If you have any information 
or knowledge on the subject, you will please state it fully. 

A. In the special session of 1808, a bill was passed making 
an appropriation to the Western Division of the Western N. C. 
Railroad, as I now remember. That bill did not accomplish 
the purpose, for the reason, as I understand, that no tax was 
levied to pay the interest. In the fall of that year, I was 
elected President of said road. I came to Raleigh, and urged 
the passage of another bill through the Legislature. I was 
then told by Littlefield and Deweese, who were a kind of lobby 
lawyers, Littlefield being the principal, that I would get no 
bills through the Legislature unless I entered into the same 
arrangement, which they said the other railroad presidents had 
made, to pay a certain per cent., (ten per cent, in kind,) of the 
amount of the appropriations. I understood from Littlefield and 
Deweese, that all the other railroad presidents had made such 
an arrangement with them. I had no conversation or agree- 
ment with the railroad presidents myself, but it was generally 
understood that each of them had employed Littlefield as a 
lobby lawyer. I then agreed to their proposition and after- 
wards paid Littlefield upwards of $210,000 in money and some 
bonds for his services in procuring the passage of the bills 
through the Legislature, making appropriotions to the Western 
Division of said road. 



202 Document No. 11. [Session 

Q. How did you make those payments to Littlefield, of 
money and bonds ? 

A. I paid money in various ways. Sometimes upon Little- 
field's order, sometimes by taking up his notes and notes of 
other parties at his request, sometimes in money to him, some 
bonds. 

Q. Will you give the names of the individuals to whom 
these several sums ot money have been paid? 

A. I have a list of the various sums of money paid out, the 

time when paid, and the names oi the persons to whom paid, 

which list I will furnish hereafter as a part of my testimony. 

I have it not now with me. I will also provide a list of the 

bonds paid out. These lists will be attached to this deposition. 
* * * * * 

Q. You stated in the former part of your examination that 
you would furnish a list of the names of persons to whom 
money and bonds were paid, are you prepared to give that list ? 

A. Since my last examination I have had a full examination 
made by my clerk and book-keeper, Mr. Eosenthal, of the 
accounts kept by him, and I hereby furnish to the committee a 
copy from the books ot the account entitled, " M. S. Littlefield 
with G. W. Swepson." This account I believe to be correct. 
The same was kept by my book-keeper and clerk, Mr. Rosen- 
thal. This list embraces the amount of $241,713.31, which I 
stated in my report made to N. W. Wood tin and other com- 
missioners, had been expended to secure the charter and appro- 
priations on account of the Western Division of the W. N. C. 
Railroad Company. 

Q. Will you please state particularly on what account these 
various sums of money were paid and whether you have vouchers 
for the same I 

A. As I stated in my previous examination, 1 was told by 
Gen. Littlefield and Deweese that I could get no bills through 
the Legislature unless I entered into the same arrangements 
agreed upon by the other railroad Presidents, which he said 
was to pay ten per cent in kind on the amount of the appro- 



1871-'72.] Document No. 11. 203 

priations. In pursuance of this agreement made with Little- 
field, who was the principal man in the negotiation, the 
various sums of money were paid out to the different persons 
named in the list furnished upon orders given by Gen. Little- 
field, or upon notes given by him. This agreement between 
Gen. Littlefield and myself was made in the early part of the 
regular session of the Legislature of 1868-'60, it having been 
understood that the bills which had passed at the special session 
of 1SGS were liable to constitutional objections. It appears 
from the bill furnished that some of these items w r ere paid 
previous to the agreement. The parties whose names appear 
in the list as having been paid prior to the agreement, were 
paid in this way, to-wit : these several parties were indebted to 
me and to the bank, I having endorsed for some of them. The 
notes were not paid at maturity. It was then understood 
between Littlefield and myself that he would take up these 
notes, and they were to be charged to him in accordance with 
the agreement, and they were so charged as of the dates of their 
respective maturity. I took vouchers or receipts for the various 
sums paid, or retained the notes or orders at the time they were 
paid, but in a settlement with Gen. Littlefield in the latter part 
of 1S69, in Jersey City, I turned over all the vouchers to him. 

In reference to the item charged to have been paid to John 
Gatlin, I wish to make this statement : Mr. Gatlin brought 
me a note of Gen. Littlefield's for $1,000 which was not due. 
He asked me what I would give him for it, and I told him 
I would give him $800, and paid him that amount for it. This 
payment was made after the adjournment of the Legislature. 
I do not know the consideration between Littlefield and Gatlin. 

In regard to the item of £3,500, charged to have been paid 
to A. W. Tourgee, my recollection is that this was a draft of 
A. ~W\ Tourgee drawn on me without authority, and I did not 
pay it until sometime after it had gone to protest, when Gen. 
Littlefield requested me to pay it, and charge it to him on this 
account. I did so. 



204 Document No. 11. • [Session 

These matters I think it necessary to explain in justice to 
the parties themselves. 

Q. Can you tell anything of the advances of the sum amount- 
ing to seven thousand live hundred dollars paid to J. II. Harris i 

A. I paid Harris, at various times, sums on orders Irom M. 
S. Littlefleld, or as requested to do so by him. "When the 
item charged in the account as $5,S00 was presented by Harris 
for payment, I paid part in money and gave my note for the 
balance, which note I afterwards heard that Harris was trying 
to sell, and I directed Mr. Askew to buy it for me, which he- 
did for $2,100 or $2,200, as I understand. I do no remember 
precisel}' the date of the note, but will hereafter furnish it. It 
was bought by Askew some time in the Spring of 18 TO. I do 
not know the consideration of the payment. Littlefleld re- 
quested me to pay the money to Harris, and not having the 
money to pay the whole amount of the order, I gave the note 
for part. I understood from Dewese that he was to give 
Harris $5,000 in consideration that Harris withdrew his name 
from the nomination for Congress in favor of Deweese. I 
took it for granted that this was a part of that sum, though I 
did not know it. 

Q. You have stated in your examination that you under- 
stood that all the Railroad Presidents had agreed to pay 10 
per cent, in kind on the appropriation made to their roads. 
Please give the names of the Railroad Presidents alluded to. 

A. The Presidents of the Roads, who were referred to by 
Littlefleld and Deweese, were the President of the Chatham 
Road, Dr. Wm. J. Hawkins ; the President of the University 
Road, when elected; the President of the new road when 
elected, which was to lead from the R. &. G. Road, at Hender- 
son, west, the name of which I do not recollect ; the President 
of the A. O. & T. Railroad, Wm. Johnson ; the President of 
the Williamson A: Tarboro' Road, Gen. J. R. Stubbs ; the 
President of the W. 0. <i' R. Railroad. Col. R. II. Cowan, was 
the President, but it was understood that the bill making the 
appropriation, provided for the displacement of Col. Cowan, 



IS 71-' 72.] Document No. 11. 205 

and afterwards Dr. Sloan was elected President. It was also 
stated by Littlefield and Deweese that there was no one here 
to represent the !N". W. IT. C. Railroad, of which Mr. Belo was 
President, or the Edenton & Suffolk Road. I never had any 
conversation on this subject with any of the Presidents of these 
Roads except Gen. Stubbs, President of the Williamston & 
Tarboro' Road, in a matter of business between him and 
myself I only state what I heard from Littleh'eld and 
Deweese. I forgot to mention the "Western Railroad, of which 
A. J. Jones was afterwards President. 

Q. Do you know of Littlefield receiving anything from any 
of these Railroad Presidents ? 

A. I saw him with $100,000, which he stated were bonds 
issued to the Chatham Railroad Company, which he said he 
got from Dr. Hawkins. Gen. Littlefield gave me an order on 
Gen. Stubbs tor $15,000 to meet some past due paper. This 
order was given by Gen. Littlefield before I had made any 
arrangement with him abont the Western Division of the 
Western .N. C. Railroad. I afterwards met Gen. Stubbs at 
the Yarborough House, and presented the order, requesting 
payment. Gen. S. said that he did not owe Gen. Littlefield 
that amount ; that he had not made any bargain with Littlefield 
himself; that Gen. Lewis had made the bargain, and knew 
what was due, and would settle it. Afterwards learning that 
Gen. Lewis and Gen. Stubbs had gone on to New York, I sent 
the order by Col. Tate for collection. He collected and paid 
me $10,000. Afterwards, in settlement, I paid Col. Tate $500 
and credited Littlefield with the balance of $9,500. I know 
nothing further of any payment by these Presidents to Gen. 
Littlefield on account of these bonds. Littlefield claimed that 
Col. Tate, as President of the Eastern Division of the W. N". C. 
Railroad, was indebted to him $11,000 for procuring legislation 
beneficial to that division. Col. Tate told me to do what was 
right about it. I paid it to Littlefield and afterwards charged 
it to Tate in settlement. He said that he would pay it out of 



20G Document No. 11. [Session 

his individual moans and not charge it to, the Company, and 
afterwards told me that Littlefield had repaid it to him. 

Q. In the statement of } T our bond account to "Woodfin and 
others, marked exhibit L, you stated that you were short 
1,278 bonds. Please state what became of them, and all mat- 
ters connected with their disposition. 

A. I file herewith the statement marked B and signed by 
me, containing an account of the disposition of the 1278 bonds, 
as far as I can remember, and give such explanation as I may 
be able to make. 

Q. State whether the amounts lost by the advances made of 
these bonds, to these parties, as set forth in this statement, have 
been adjusted K 

A. I have not had a settlement with any of the parties. 
The losses are still unpaid. 

Q. In your bond account you mention 149-1 bonds turned 
over to Littlefield, and in the hands of Soutter & Co. State 
whether these bonds were subject to any charge whatever, or 
in any way hypothecated ? 

A. They were hypothecated as security to a loan of £250,0< m i, 
as stated in the account mentioned above, and in my statemenl 
accompanying that account. They were also subject to a 
charge for a " margin " for 100 bonds purchased by said Sout- 
ter & Co., on account of Judge "NY. B. Rodman, for which 1 
had agreed to furnish the margin. Gen. Littlefield received 
them from me, subject to these charges. 

Q. Do you know what disposition was made ol these bonds \ 
Or have you heard ? 

A. I was informed by Mr. Porter, one of the firm of Sout- 
ter <$c Co., that they sold these bonds on account of Littlefield 
at between 30 and 35 cents net. 

Q. In your bond account GO bonds are named as being paid 
to attorneys. Please state to whom, and for what service, and 
it any other sum w<1s paid to same attorneys. 

A. While the suit known as the University Railroad suit was 
pending in the Supreme Court, there was an impression or 



1871-72.] Document No. 11. 207 

understanding in Raleigh that the court would probably decide 
against the validity of all the bonds known as the " special 
tax" bonds. I was about that time going to New York, 
and immediately on my arrival there, I consulted Mr. Porter, 
of the firm of Soutter & Co., which house was the financial 
agent of several of the roads having special tax bonds, and 
got him to come to Raleigh to look after the interest of these 
bond holders, to employ counsel, etc. He came to Raleigh 
and remained sometime, probably two or three weeks. After 
iris return to New York he informed me that he had employed 
as counsel in the said case the following attorneys, viz : Judge 
Person, of Wilmington, Hon. D. G. Fowle and Col. E. G. 
Haywood, of Raleigh. I asked him what the expenses were 
of establishing the validity of the bonds. His reply was that 
they were very heavy, but gave no sum. He did not tell the 
amount, but when the account of Soutter & Co. was rendered, 
I found the following as my proportion as President of the 
Western Division of the W. N. C. K. R., to wit : 60 State 
bonds, charged as paid attorneys ; and the following cash 
charges: "Paid attorneys m Raleigh, $2,000.00;" "Attor- 
neys, establishing validity of bonds, $12,500 ;" :t Expenses 
establishing validity of bonds, $6,750.00 ;" making cash. 
$21,250.00. 

When Mr. Porter came on to Raleigh, it was agreed that I, 
as President of the Western Division of the W. N. C. R. R. 
Co., and A. J. Jones, as President of the Western R. R. Co., 
would pay our proper portion of the expenses incurred in 
establishing the validity of the bonds. I paid my proportion 
as stated above. I heard Jones say he never paid anything. 
Q. In your bond account there are 20 bonds, 90 bonds and 
50 bonds named as turned over to Gen. Littlefield, Please 
state if you know or have heard what became of them ? 

A. I understood that Gen. Littlefield got the 20 bonds from 
the Home Insurance Company and returned them to the State- 
Treasurer. As to the 90 bonds, Col. Calvin Littlefield, as 
agent for Gen. Littlefield, went to New York and settled the 



208 Document No. 11. [Session 

matter with Hooper, Harris 6c Co., selling to them for alxnvt 
$23,000, taking $3,000 in money and taking their note for the 
balance. As to the 50 bonds, I had a note of Fells 6c Co., 
payable to me as President of the "Western Division of the 
W. N. C. R. R., for 50 bonds borrowed, to be returned on 30 
days notice, which note I transferred, as President, to Little- 
field when he became President of the same company. I 
was informed by Pells & Co. that it was collected by E. 
Burros, of Wilmington, through McKim & Co., of Baltimore. 

Q. State whether you know anything of the lawsuit known 
as the injunction case of Eobt. C. Kehoe et aL, against D. A. 
Jenkins, Public Treasurer, and others, in relation to the A. T. 
& O. Railroad bonds, and whether or not you received any of 
the bonds of that road from Littlefield or otherwise ? 

A. I never received a single one of these bonds from Gen. 
Littlefield, or from any one else, except some that I borrowed 
from R. Y. McAden in New York for a short time, and all of 
which I returned at the time agreed upon. 20 of those I bor- 
rowed from Mr. McAden, I gave to Dr. Sloan, to induce him 
to sign an agreement entered into in New York in the sum- 
mer of 1869, by the holders of N. C. bonds, in reference to the 
sale thereof. The statement of Gen. Littlefield made to the 
investigating committee known as the Bragg committee that 
he carried to New York, and delivered to L. P. Bayne 6c Co., 
for me a bundle of these bonds, is entirely untrue. I bought 
12 of the bonds from Deweese in Washington City, to replace 
in part those I had borrowed from McAden, and bought the 
balance in New York to make up the 20. I heard that 
Deweese had spoken to Judge Merrimon to institute a suit 
like that mentioned, in this question. I told Judge Merrimon 
it waa a blackmailing suit, and advised him not to appear in it. 
lie immediately declined to appear. I then sent fur Deweese, 
and told him it was a blackmailing suit, and advised him not 
to bring it, and he &aid he Mould drop it. I heard that Gen. 
Ransom was applied to very soon thereafter to bring a similar 
suit, and declined, as I was informed by him, to have anything 



1871-72. Document No. 11. 2<"i9 

to do with it. After the suit of Kelioe vs. the Treasurer was 
compromised, I was informed by Dcweese in Washington or 
New York, that he had procured that suit to he brought. 

Q. Do you know the purpose for which this suit was 
brought '. 

A. I do not know positively, bnt my understanding was 
that it was for the purpose of forcing the officers of the A. T. 
& O. R.R. Co., to pay 10 per cent, in kind, of the bonds 
authorized to be issued to that company, for procuring the 
passage of the act by the Legislature. This conclusion I dreTT 
from attendant circumstances and facts transpiring at the time. 

Q. State what sums were invested by you in Florida State 
or railroad bonds, and whether the investments were made by 
you individually or as President of the Western Division of 
the W. N. C. R. R ? 

A. My account as settled with the Woodfin commission 
contains a full and accurate statement of those transactions, 
and I refer to it as an answer to this question. When I com- 
menced to make these investments, I intended them on my 
individual account, but after the heavy losses I sustained in 
New York and other places, I turned them over to Littlefield 
to secure the Western Railroad Company, he agreeing to pay 
the full amount of the Florida investment to that company. 
In the settlement with the Woodfin committee he finally 
turned over the Florida investment to pay that amount with 
interest. 

Q. State how much you invested in W. C. & R. R. R. 
bonds, and on what account; whether individually, or as Presi- 
dent of the Western Division of the Western North Carolina 
Railroad Co. ? 

A. I bought 226 of these bonds at the cost of $146,90* 
appears in said account, and turned them over to Gen. Little- 
field, as President of the Western Division of the We6l 
North Carolina Railroad Company. They were entirely un- 
encumbered when turned over to him. 

Q. Do you know of any sums paid to other parties, ej 
L4 



910 Document No. 11. [Session 

as hereinbefore stated, for the purpose of procuring the passage 
of hills through the Legislature I 

A. I told Gen. Clingman it he would come to Raleigh and 
aid in drawing hills, and procuring their passage, I would pay 
him satisfactorily for his services. lie came to Ralegh for this 
purpose, and I advanced him, from time to time, different sums 
for this and other matters mostly connected therewith, amount- 
ing: i' 1 ftU to about $1,500. These sums were at first to be 
charged against the Railroad Company, but I told him I pre- 
fered not to make a charge against the Railroad on account of 
these matters, and gave him a receipt against the sums ad- 
vanced him, stating they were made to him as in payment for 
services rendered by him as my attorney. 

Q. Had any other person or persons any interest in the 
Florida investments, and it so, who were they, and what were 
their interests? 

A. Gen. Clingman had an interest in that investment. We 
had_a written agreement, a copy of which I have and will file, 
marked "C." 

Q. Do you know of any State bonds, money or other thing 
of value being paid directly or indirectly, or given to any mem- 
ber'of the Legislature tor the purpose of affecting his action, as 
^'member of the Legislature, or for any other purpose? 

A. I do not. 

Q. DoTyou know of any bonds, money or other thing of 
value beingjgiven or offered to any officer of the State govern- 
ment, directly or indirectly, to influence him in his official 
action or for other purposes \ 

A. I do not. 

<l. State what induced you to guarantee the accounts of 
Laflin and Martindale and Moore, and to furnish the margin 
for the bonds purchased by them, and to furnish the margin 
for the 100 bund.- purchased by Judge Rodman 1 

A. Laflin had bought a lot of bonds which were to be sold 
out for want of a sufficient margin, bonds having declined. I 
was urged by sever. d persons holding bonds, who did not wish 



1371-72.] Document No. 11. 211 

them forced on the market for fear of producing a fall, to- 

furnish the required margin. I agreed to do so, however, pre- 
ferring to have the account kept in my own name, fearing lie 
would use the bonds improperly. I first put up thirty bonds 
' with Clews & Co., for the margin, and as bonds continued to 
decline, in a few days they demanded twenty-five bonds more 
which I also furnished. Soon after that I left New York, and 
the bonds were afterwards sold by Clews & Co., and they 
claimed of me, above the amount of the sale of the bonds, 
$21,000 to cover the loss in the transaction. The circumstances 
in regard to Messrs. Martindale and Moore were very much 
the same. We all thought the bonds would go np. They all 
came to me and said the}" wanted to buy bonds on speculation, 
and asked me to loan them bonds to furnish the margin. 1 
lent to Martindale 10, and to Moore 20 bonds for this purpose. 
The bonds continued to decline, and the houses who had bought 
for them being about to sell them out, I got L. P. Bayne & Co. 
to carry the bonds for them, by my becoming responsible for 
any loss sustained. They were afterwards sold at a loss, as 
before stated. It was generally thought that North Carolina 
bonds would go up, and I heard that Judge Rodman wished 
to buy some and wanted some one to furnish a margin. I can- 
not recollect now who informed me that Judrre Hodman wanted 
to purchase and to get some one to furnish a margin. I met 
him in the St. Nicholas Hotel and asked him it he wished to 
purchase the bonds. He replied that he did, and I then agreed 
to furnish the margin for 100 bonds to be purchased by Soutter 
t*c Co., for Judge Rodman. I did so and they accordingly made 
the purchase. This was in August or September, 1S60. "When 
I turned over the 1,494 bonds mentioned before, to Gen. Little- 
field, they were held by Soutter it Co., subject to this margin. 
What was done about it afterwards I do not know. 

Q. State what official position these persons occupied in 
North Carolina? 

A. Latlin, Martin and Moore]were members of the General 



212 Document No. 11. [Session 

Assembly. Judge Rodman was one of the Associate Justices 
ot the Supreme Court. 

Q. Will you state all you know of the organization of the 
AWstern Division of the Western North Carolina Railroad '. 

A. At the session ot the General Assembly held in July 
and August, 1S6S, an act was pa86ed dividing the Western 
Xorth Carolina Railroad into two divisions, known as the 
Eastern and Western Divisions, and authorizing the appoint- 
ment of officers and directors of the Western Division. A 
meeting ot the company was held at Morgan ton, in accordance 
with the charter, and then the two divisions known as the 
Eastern and Western Divisions were made — the Eastern 
retaining its old organization, and the Western was organized, 
and I was elected as President, sufficient stock having been 
subscribed to comply with the terms of the charter. My recol- 
lection is that in the meeting at Morganton, at the time ot the 
organization of the company it was determined by the stock- 
holders that 5 per cent, of the subscription then made should 
be paid in cash. The amount of subscriptions made at that 
time was about $308,000. The required 5 per cent, was paid 
on the $8,000. $200,000 of the subscription was made by 
Gen. Littlefield, and he gave a sight check for $10,000 on 
Soutter & Co., which was never paid. I think $100,000 was 
subscribed by a Mr. Reynolds, of Statesville. lie gave a due 
bill for the 5 per cent., which I afterwards returned to him 
and scratched off his name from the stock book. At one of 
their meetings at Morganton, the Board of directors passed a:: 
order authorizing the President and chief engineer to let the 
work to parties who had subscribed the stock, thereby arrang- 
ing to draw the bonds, as had been customary on the Eastern 
Division. Shortly alter this the chief engineer and myself 
met in Raleigh. Large subscriptions were made by Gen. Lit- 
tlefield to the amount of one million dollars or thereabouts. 
Subscriptions were also made in the name ot my brother, and 
by Col. Tate and Gen. Henry — Col. Tate to the amount ot' 
s: ,000, and Gen. Henry $400,000. Enough was taken to 



1S71-72.] Document Xo. 11. 213 

make up the whole $2 ; 000,000. Contracts were then let in 
accordance with'the orders of the board and the custom of the 
Eastern Division, to Col. Tate from Asheville to Paint Eock, 
and to Gen. Littlefield from Asheville west. There was a 
condition in those contracts, the company reserving the right 
to cancel them or re-let to any other parties. I then made 
the certificate for the purpose of drawing the bonds ($1,000,- 
000.) There was a meeting of the company at Asheville at a 
subsequent time, at which a large portion of the work was let 
to the other parties, no regard being had to this previous 
contract, as the board had the right to cancel or re-let the 
work. In regard to drawing the second instalment ot bonds, 
(after the £1,000,000,) I think there was an additional subscrip- 
tion made by Littlefield, but the 5 per cent, was not paid by 
him. My impression is, that I must have made the certificate 
to the governor, otherwise I do not see how I could have got- 
ten the bonds. But I cannot say whether I did or did not 
make the certificate ; but I got the bonds. 

Q. Which of the subscriptions, if any, did you regard as 
bona fide subscriptions ? 

A. I did expect that the 5 per cent, on the subscription of 
$30S,000 made at Morganton, would be paid in money, but 
had no expectation.that any of these large subscriptions would 
be paid in any other way than in work, by the contractors who 
would do the work when the contracts were relet to the par- 
ties who would actually do the work. At the meeting at Ashe- 
ville when the work was to be let to the actual contractors, my 
recollection is that the Chief Engineer was directed to examine 
the several bids and report upon them to the directors at their 
next meeting. No other meeting was held for some consid- 
erable time. The Chief Engineer without authority from the 
board, put a considerable number of persons to work upon the 
road, and none of their contracts were ever approved by the 
board while I was President. 



214 Document No. 11. [Session 

Raleigh, Sept. 21st, 1871. 

The examination of G. W. Swepbon, was resumed. 

Q. Were you not a member of the committee at the meeting 
in Morgan ton to whom the books of subscription, and the sub- 
ject ot subscription for stock was referred, and did not the com- 
mittee report that 308 .-hares of stock had been subscribed, 
and that ."» per cent, had been paid on the subscriptions accor- 
ding to the resolution ot the meeting, and did you not agree 
as president to receive the check of Littlefield and the note of 
Reynolds as so much cash I 

A. I was on the committee and did make the report, and 
the committee did receive the note and check, as cash. I was 
not President at the time of the report. The note and check 
were turned over to me, when I became President, to collect. 
Mr. Reynolds did not pay his note, and I returned it to him, 
and cancelled his subscription for stock. Littlefield's check was 
not paid, and I turned it over to him when he became Presi- 
dent. I have no recollection of having received as President, 
the check or note as so much cash, merely taking them for 
collection. 

Q. Did not Mr. Reynolds' propose to get the money to pay 
the 5 per cent, cash on his subscript ionJo his stock, saying 
that he could get it by going down to Statesville, and did you 
not tell him the note would answer in its place ; and, that you 
would take it as cash, and he could paj it afterwards, and did 
you Tiot afterwards strike his name from the Stock-book and 
cancel his subscription without any authority from the Board 
of I >iivctors, or any action on their part? 

A. I think he did say he could get this money by going 
down to Statesville but he gave his note at thirty or sixty days. 
I wrote to him several times about payment, and as he did not 
pay, I struck bis name from the stock-book without the 
authority of the Directors, or any body else. 

Q. Was not the subscription of Mr. Reynolds considered as 



1871-'T2.] Document No. 11. 215- 

having been made in good faith, and was lie not considered as 
able to comply with it ?■ 

A. I think it was made in good faith, and I regarded him as 
solvent. 

Q. By what commission were the . subscriptions of stock 
made in Raleigh received, and was the 5 per cent, paid on it. 
or any part of it ? State the names of the subscribers, and the 
amount subscribed for by each as accurately as yon can recol- 
lect. 

A. I think the subscription was received by myself, and one 
other commissioner whose name I do not now remember. 
The list I cannot give more accurately than in a former part f 

my testimony, unless I had the books. There was no pay- 
ment of the 5 per cent, on the subscription made in Raleigh, 
nor were there any checks given for that or any other sum. 

Q. Did you not report to the Board of Directors at a subse- 
quent meeting, the names of stockholders in the company 
which was afterwards copied in the minutes of the Board, and 
did you not state, that the cash payment of 5 percent, had been 
made by the stockholders, and did you not state at the stock- 
holder's meeting, when General Littlefield was elected Presi- 
dent, that the cash payment of 5 per cent, had been made by 
all the stockholders, including the large subscriptions made for 
stock in Raleigh ? 

A. I think I did make substantially that statement All 
these large subscriptions of stock had been transferred to Lit- 
tlefield at that time, except Colonel Tate's, which was cancel- 
led, because he had not paid his 5 per cent. General Littlefield 
had given me a check for his 5 per cent., which I then held. 

Q. At what time was the check given, and did you agree to 
receive it as cash for the 5 per cent, on his subscription? 

A. One check was given at the time the subscription of the 
stock by Littlefield, and he gave other checks tor the 5 per 
cent, when the stock was transferred to him. The checks were 
counted as money, but the understanding was that the 5 per 



216 Document N<>. 11. [Session 

cent, was distributed to the contractors, to be paid for in work, 
and credi i the checks. 

' Q. Were there any contractors besides Littleiield and Tate, 
and with 'whom -was this understanding ma 

.. The; none • ..; that time. The understand- 

was made between Littlefield and myself, the former hav- 
ing the control of the stock. 

Q. Was the contract Midi Littlefield and Tate, or either of 
them, made in ing? 

A. Yes, both of them, and placed on file by the Chief En- 
gineer of the road, ^laj. -r Turner, tu whom they were deliv- 
ered. 

Q. "Were not these contracts considered at the time as a mere 
formal compliance with the charter to procure the inning of 
the bunds and without expectation that either of the parties 
would comply with tin- terms by doing the work '. 

A. It was considered a mere formal compliance in order to 
get possession oi" the bonds. There "was no expectation that 
either of the parties would do the work themselves, or any 
part ot it, and that the road would be let to real contractors. 

Q. Did the Board of Directors ever take any action in regard 
to these contracts, either in formally accepting them or in 
ordering them to be cancelled '? 

A. None whatever that I know of. Advertisement was 
made for bids by honajidv contractors, on so much of the work 
as had been located, surveyed and estimated, and a great deal 
of the work was let to other parties without regard to these 
contractors. 

Q. When was the subscription made to the stock to entitle 
the road to the issue of the second instalment of bonds from 
the State '. Who were the subscribers to the stock and by 
whom were the .subscriptions received? 

A. Gen. Littlefield was the sole subscriber. He gave his 
check as cash for the 5 per cent., as lie had done before, with 
the understanding that it was to be paid in work as before. 



1871-72.] Document No. 11. 217 

Q. Was there any expectation that Gen. Littlefield would 
pay for the stock subscribed by him ? 

A. None except the $10,000, the. 5 per cent, on his first 
subscription. It was expected that it was to be divided 
among the actual contractors. It was supposed they would 
get pay for their work and get their stock clear, as had been 
done on the Eastern Division and North Carolina Eailroad. 

Q. Did you communicate to Gov. Holden, at the time you 
made the certificate to draw the stock, any of the circum- 
stances connected with the subscription to the stock or to 
letting the road to contract, which you have herein stated '. 

A. Nothing of the sort did I ever communicate to him. 

Q. State all the circumstances connected with the election 
of Gen. Littlefield as President of the Western Division at 
the meeting of the stockholders in zVsheville, in October, 1869 ' 

A. In New York, just before the election of President of 
the compan}', in 1869, Mr. Roberts, the Secretary of the com- 
pany, and Mr. Dowell, of Asheville, were caucussing fre- 
quently with Gen. Littlefield. Littlefied came to me and 
stated that it was determined that he should be elected Pres- 
ident of the company at the next October meeting. I told 
him very well, but that they must settle with me ; that a good 
many of the bonds were pledged as margins for various per 
sons and I had lost some of them ; that they must take these 
bonds and assume the margins ; that they must take my invest- 
ments in Florida, and if they would settle up and let me out 
with whole bones, I would settle with the road in everything 
and willingly stand aside and say nothing. Littlefield agreed 
to do so. We both attended the meeting at Asheville, where 
I declined to be a candidate for the Presidency. A caucus 
of the Republican members of the corporation was had, I un- 
derstood, at which I was not present, but Gen. Littlefield told 
me it was determined to have a Republican President of the 
road, and that he was to be elected. The State's proxy was 
sent to me by Gov. Holden in blank, inclosed in a letter, and 
requesting me to insert the name of Mr. G. W. Gahagan if 



213 Document No. 11. [Session 

lie were present. If not, I think W. M. Bobbins was to be 
proxy. I know that Gen. Littlefield had applied for the 
proxy, and that. Gov. Hoi den had refused to appoint him. I 
gave the proxy to Mr. Gahagan. I was applied to by several 
persons to continue as President, but declined. The meeting 
of stockholders was held and an election of directors was had, 
and Gen. Littlefield by them elected President. I was elected 
on the Board and voted for Littlefield. Clingman, Davidson 
and Keener voted against him, I believe. 

Q. Look over the account furnished by you as charged 
against Littlefield, and explain the items as well as you can 
recollect, and the considerations thereof. 

A. All these items were paid, as I have before stated, under 
an agreement between me and Littlefield. As to items charged 
against A. W. Tourgee, June 17th, 1SCS, of 8200, the account 
given by Mr. Rosenthal is correct. As to the two items 
charged as paid to J. W. llolden, the item of 8200 charged as 
paid to him July 1st, 1S08, was a note of Holden's to the bank, 
which note was turned over to Littlefield, and the amount 
charged to him. My impression is that the $750 was paid on 
an order of Littlefield. As to the item of $400, September 
15th. 1868, charged against (ton. Littlefield, I think it was a 
note in the Raleigh National Bank,, which I had to pay. As 
to the several amounts of November 2d and 17th, they were 
a lot of drafts drawn either by Peweese or Abbott, and en- 
dorsed by the other, accepted by Littlefield, which I endorsed. 
They allowed them to go to protest, and I had to pay and take 
them up. As to the item charged November 25th, 1808, one 
■ >t $1,800 and one of $1,000, I do not remember. I have 
explained elsewhere the charge of $14,000 against S. W. Mel >. 
Tate. Afl to the items dated January 9th and '21st. 1869, 
against M. B. Littlefield and others, I do not remember par- 
ticular^ but believe the explanation given by Mr. Rosenthal to 
be correct I do not remember. As to items of April 12th 
13th and 37th and May 8d, 1 cannot remember. T think they 
were for money handed to him. Item of ^■"' c,u to Mr. 



1871-72.] Document No. 11. 219 

Churchill, was for money handed to him in connection with 
the Standard newspaper. The items of July 21st and Sep- 
tember 2d, 1869, two of $4,000 each, I do not remember but 
suppose Mr. Rosenthal's account to be correct. The item of 
8300, October 7th, 1868, was a note in bank of R. I. Wynne, 
endorsed by J. T. Deweese, which I paid and charged to Lit- 
tlefield at his requesc. As to items of $5,000 and 11,000, No- 
vember 21st, 186S, it was money paid to Deweese at the request 
of Littlefield and charged to him. As to charge against J. A. 
Hymau, my impression is that the item $500, October 9th, 
1868, was a note endorsed by Deweese and Harris for money 
lent to him, which was afterwards charged to Littlefield at his 
request, and money handed over to Hyman. My impression 
of the balance of the items was that it was money paid to him 
by request of Littlefield or his order. In regard to the charges 
against B. Laflin, my impression is that the $500, October 6th, 

1868, was a note for money loaned, and I think Mr. Rosenthal's 
explanation of the other item of $285, November 1st, 1868, is 
correct. As to charges against James H. Harris, I have here- 
tofore testified. As to charges against A. J. Jones, December 
16th, 1868, of $2,500, March 8th, 1869, $5,000, March 29th, 

1869, $2,500. These amounts were paid in cash to Jones by 
direction of Littlefield. Charges against James Sinclair : As to 
the item of $300, of January 28th, 1868, and of $2500, March 
28th, they were paid to Sinclair by direction of Gen. Little- 
field. Mr. Rosenthal's explanation of the other items|is correct. 
As to charges against G. Z. French, of $500, Feb. 17th, 1S69, 
I think that was paid in money. As to the two drafts, June 
17th, 1869, one French and Estes, the other Estcs and French, 
each for $10,156.87, they were drafts discounted in New York 
which I endorsed and had to pay. These drafts were handed 
to Gen. Littlefield, and charged to him by his directions. As 
to the two items of March 6th and 15th, each of $5,000, and 
of June 15th of $3,000, they were drafts, I think, endorsed by 
French and Abbott, and discounted in some of the Banks, 
which I think I had endorsed. They were paid by me and 



220 Document No. 11. [Session 

charged to Gen. Littlefield by his directions. I think the 
charge against J. II. .Davis was money paid on an order oi 
Gen. Littlefield, or it may have been a note, charged by direction 
of Gen. Littlefield. I do not remember about the charge of 
$95 paid II. Eppes. The charge of $4,000, Feb. 24th, L869, 
paid II". Downing, was, I think, an order oi Littlefield. I do 
not remember about the charge of $450 paid H. J. Kutj 
Feb. 24th, 1869. Charge against E. K. Proctor, March 9th, 
1869, was either a note or draft of Littlefield. Astothechai 
against J. O. Abbott, March 29th, June 5th, and Oct. 3 
1SG9, amounting to s20,000, they were paid by request of 
Gen. Littlefield. The Clingman charges h en explained. 

As to charge of $25,000 against Foster, April 25th, 1869: 
Mr. Foster^ the member of the Legislature from Bladen, came 
in to sec me with G. Z. French, and he had a note or draft of 
Littlefield's payable to T. Foster, which I paid by request of 
Littlefield. The charge against G. P. Peek, June 14th, ISiiM. 
$4,500 : That was either a draft or note of Littlefield, I paid by 
his request. As to the charge ot $15,00^ Sept. 80th', 1869, 
against J. M. Heck, Littlefield wasowin^ Heck fclo,000, money 
loaned. What the other $5,000 was for 1 do not know. 
Littlefield drew on me, and I accepted, all of which Mr. 
Rosenthal has explained. As to the charge of $1,510 against 
J. P. Branch, it was money borrowed by Littlefield from 
Branch. As to the charge for diamonds, Dec. 11th, 186S, I 
bought some diamonds in this city from some persons whose 
names are not remembered by me, at the request, or ]>y the 
direction of Gen. Littlefield, tor him, and I paid for them. 



September 22d, 1871. 

Testimony of G. W. Swepson continued: 
Q. Please state what amount of bonds or the proceeds there- 
of, were expended in the purchase of Florida Railroad stock 



1871-'72.] Document No. 11. ' 221 

and bonds, and for whose benefit said investments were made? 
A. As a full answer to the above question, I file a copy of 
an affidavit made by me in a suit pending in the Supreme 
Court ot New York wherein the Western Division ot the 
"Western North Carolina Railroad is plaintiff and Sidney 
Hopkins, et. ah, are defendants. I wish to correct the affi- 
davit in one particular, that is to say, the $720,000 there 
spoken of is intended to embrace the $150,000 there spoken of. 
Q. Do you know how the bonds issued to the Western Rail- 
road and placed in the hands of A. J. Jones, President of said 
road, were disposed of or expended ? If so state all you know 
about it. 

A. I know that Jones was in the pool, I have before spoken 
of, that he invested largely in company with myself and others, 
to-wit: Sloan and Littlefield in North Carolina bonds, which 
bonds were bought by Utley & Dougherty, Jones placing the 
bonds issued to his road in their hands, as a margin ; there 
were large losses in this transaction, for my portion of which 
losses I paid $70,000. I understood from Jones, Sloan being 
present, that he furnished Sloan's margin. Jones aftewards 
9howed me Utley & Dougherty's account on Sloan's loss, and 
it was over $75,000 in cash. I understood from Jones that 
Sloan afterwards denied being a partner, and never paid any of 
the loss. It was currently rumored in New York that Jones 
lost large sums at faro. 

Q. Was there any contract made between the chief engineer, 
J. C. Turner, and Drane and McDowell for building the 
Western Division of the road or any part of it ? 

A. The chief engineer did award a very large contract to 
Drane & McDowell which was submitted to me to approve, 
which I declined to do, and they did none of the work. 

Q. Did you state at a meeting of the stockholders in Octo- 
ber, 1S69, in Asheville, that you had not sold your bonds, and 
still had control of them ? 

A. I don't believe I stated that I had control ot all of them. 
I did say I was ready to settle. 

Q. Did you object to the letting of the road to contract in 



222 Document No. II. [Session 

the spring and summer of 1869 on the ground that the bonds 
had not been sold, and there was no money to pay the eon- 
tractors i 
A. I objected to putting a large number of hands to work 

because it would necessitate the sale of a great many bonds, 
and there were already too many on the market. 

GEO. W. SWEPSON. 
Sworn to and subscribed before the commission. 



Raleigh, Dec. 2, 18T1. 

Geo. W. Swepson being again before the Commission, tes- 
tified as follows : 

Q. Did you hold any note or notes ot Samuel T. Carrow 
for about $3,500, mentioned in your settlement with General 
Littlefield, President, during the sitting of the committee 
known as the Bragg Committee? h' yea, state the considera- 
tion thereof, and what proposition, if any, was made to you by 
Mr. Carrow in reference to giving up these notes and the dis- 
charge of the Bragg Committee, and stopping investigations 
by the Legislature. 

A. I lent Mr. Carrow $8,540 of the funds of the Western 
Xorth Carolina Railroad, Western Division, in or about Jul v. 
L869, and took his notes. In my settlement with Gen. Little- 
field as President of this company, J paid over these notes to 
him as part of the funds of the company. Gen. L. said that 
Carrow would never pay him the notes, and left them in the 
hands (.1 Rosenthal for collection. Afterwards, I think in the 
latter part of 1SG9, or early in L870, Littlefield proposed to 
borrow of A. J. Jones $8,700, saving that he wished topay 
Carrow a debt he owed him ; that Carrow could then pay off 
these notes, and he could repay Jones. Jones said lie would 
lend the money, provided I would be security for it. 1 agreed 
to do so, and Jones lent Littlefield the money. I do not know 



1871-72.] Document No. 11. 22 J 

what he did with it. Carrow did not pay these notes. I repaid 
the $3,700 lent by Jones to Littlefield, and then held these 
bonds of Carrow to secure it. In a day or two, or it might 
have been the same day, Carrow came to niy room, and after 
talking some time in a rambling- sort of way, proposed that if 
I wonld give up these notes, and pay him a certain sum which 
he named, either $10,000 or $15,000, and would pay the 
losses sustained by Judge Rodman in the bond speculations 
in. New York, he (Carrow) would have all investigations into 
railroad matters stopped. I declined the proposition deci- 
dedly. He said the conversation was in my room with no 
other person present but him and myself, and if ever I told ot 
this proposition he would deny it. I told it to Mr. It. Y. 
McAden, and perhaps others, and heard that MeAden and 
Carrow had some words afterwards about it in the presence 
•of several gentlemen. 

Q. Did you ever have any speculations in bonds or any 
other thing whatever, in conjunction with Gov. Holden, in 
which profits were made, and part paid to him ? 

A. None whatever. And I never gave to, or divided with 
him any profits of any trade made by me. 

Q. Did Gov. Ilolden send any telegrams to New York at 
your request, to the effect that the interest on State bonds 
would be paid ? 

A. I do not remember. It is possible he may have done so. 

Q. When were you first informed of the decision in the 
University Hail road suit as first understood, by whom were 
you informed, and when did you telegraph the information 
to New York \ 

A. I was first informed ot the supposed decision by Col. 
Wm. Johnson, in the Raleigh National Bank, who said he had 
just seen the opinion in Chief Justice Pearsons' room in 
Raleigh That was I think on Thursday, July 1st, 1869. He 
said that that opinion made the whole of the special tax bonds 
unconstitutional, and he should go home, and not give himself 
anv further trouble about the bonds so far as his road was con- 



224 Document iSo. 11. [Session 

cerned. Next morning J left lor Now York, reached Balti- 
more Saturday morning, remained there until Saturday night, 
ami reached New York Sunday morning. I telegraphed to 
Porter from Baltimore that I was coming, and to meet me 
Sunday morning, but did not give the information as to the 
decision of the court. I think I also telegraphed to Judge 
Fowle from Baltimore to try to get a rehearing of the cause. 
"When I reached New York, I met Porter who was better in- 
formed as to the decision of the court than I was. lie never 
told me how or from whom he derived his information, though 
I asked him. He told me that he was in communication with 
some person in Raleigh by telegram, but did not say who it 
was. 

GEO. W. SWEPSON. 
Sworn to and subscribed before the Commission. 



July 24, 1871. 

G. Rosenthal, called, sworn and testified. 

Q. What is your business and occupation ? 

A. I am a clerk, and have heretofore acted as clerk and 
book-keeper for G. W. Swepson, and had charge of hi6 books 
and accounts from July, 1S65, to the fall of 1870. 

Q. "Will you look at an account marked A filed by G. W. 
Swepson as a part of his testimony, containing a list of persons 
to whom money was paid, and say whether that account is in 
your handwriting, and give the commission all the information 
you have in reference to the same ? 

A. It is in my handwriting. It was copied from the books 
as kept by me in the year 1868-'69. These different items 
were handed to me as book-keeper from time by G. W. Swep- 
son with instructions to charge the same to M. S. Littlefield. 
They were in the shape of orders, drafts or notes of individuals' 
Cash was paid on these notes or orders, sometimes by myselP 



1871-'T2.] Document No. 11. 225 

always by the order or directions of Mr. Swepson. Sometimes 
Mr. Swepson paid himself, with directions to me to charge it 
to account of Littlefield. These payments were made in the 
Raleigh National Bank, in which building I occupied a separate 
room. Whenever the money was paid I retained such notes 
or orders as I received by direction of Mr. Swepson to be 
retained as vouchers in settlement with Mr. Littlefield. They 
were retained and kept by me until a settlement between 
Swepson and Littlefield in October, 1869, in Jersey City. I 
believe the items set forth to be a correct account of the money 
paid by G. W. Swepson to Littlefield, or his orders. 

Q. Do you know the consideration for which these various 
sums of money were paid, and the circumstances under which 
they were paid ? 

A. As to the first item charged against A. "W. Tourgee of 
$200, my impression is, that it was a note that was in bank 
which was overdue, and Swepson took it up. It is probable, 
however, that it is for money loaned directly by Swepson to 
Tourgee. I was told to charge it to Littlefield. I was told by 
Mr. Swepson that he was to pay Littlefield a certain sum of 
money for getting these railroad "bills through the Legislature, 
and these payments were to be charged against that account. 
As to the second item of $2,502.55 against Tourgee, of date 
July 24th, 1SG9, a draft drawn by Tourgee on Gr. W. Swep- 
son for $3,500, was presented for payment, and payment re- 
fused, and it went to protest. Some time afterwards Mr. 
Swepson instructed me to pay it, and charge it to this account; 
which I did. As to the items against J. W. Ilolden, I think 
the first of $200, was a note of Iloldens in bank past due, 
which Mr. Swepson paid, or it may be that it was money 
loaned directly by Mr. Swepson, but I cannot be positive. 
As to the $750, my impresssion is that it was money paid 
direct to Ilolden by Mr. Swepson, but of that, also, I cannot be 
positive. As to the items of M. S. Littlefield and others of 
Nov. 2d and 17th, 1868, my impression is that they were 
generally drafts drawn on Littlefield by Abbott and Defwcese, 

15 



220 Document No. 11. [Session 

^aod accepted by Littlelield, and endorsed I think by Swepson. 
If there were otlier parties, I do not remember them. Those 
•drafts were taken up, or paid by Mr. Swepson, and directed to 
be charged to this account. There was a private conversation 
between Mr. Swepson and these parties in his room in the 
bank, which I know nothing of. They came out, and some 
calculations were made by me under their directions. I do 
i~ot know the precise time when the charges were entered np. 
As to the item of $4,000 dated Sep. 15th, 1SG8. My recol. 
lection is that it was a note made in hank by Mr. Littlelield 
upon which Mr. Swepson was security, and which lie had to 
pay. The item of $1,S00, and of $1,000, Nov. 25th, 1SGS. 
My recollection is that both were for money handed to Little- 
field by Mr. Swepson. As to the item charged against S. 
McD. Tate Cor S. M. L., for $14,000. I know nothing about 
it, except that 1 was told to charge it. As to the items against 
Littlelield and others dated Jan. 9th and 21st, 1869. My recol- 
lection is that they were drafts drawn by French and Abbott 
principally, (if there were others, I do not remember their names) 
upon M. S. Littleficld. and discounted by E. E. Burrus, of 
Wilmington, who came to Raleigh and obtained the endorse- 
ment of Mr. Swepson, and T charged them to this account. 
As to the items ot $2,000 each, Feb. 21th, L869, one 1 was 
directed by Mr. Swepson to charge against Littleficld, he hav- 
ing paid that Bnm in cash to him in Xew York, and on the 
came day a telegram was received by Mr. Swepson from Lit- 
tlcGeld, asking him to place to hi.- credit in New York by tele- 
graph $•_',(•< 10, which was done. As to the other items charged 
April 12th, 13th and 27th, I know nothing of them, except 
that I was din cted to charge them to Littlelield. nor can I 
explain item of May 3d, L869, except in same way. The 
item of $54 . M. W. Churchill, June 22d, 1869, was money 
handed to him. I know nothing of item $500, M. S. L., 
July 2nd, 1869. The item of two notes for $4,000, July 21st, 
and same, Sept. 2nd, L869, were notes in bank against Little- 
ficld, for which Mr. Swepson was security, and which he had 



1871-72.] Document No. 11. 227 

to pay. The item of $.300, Oct. 7th, T know nothing of. I 
know nothing of the items of $5,000 and $11,000, Nov. 21st 
1SG8, against J. T. Deweese, except that I was told to make 
the charges. The items charged against J. A. llyman, Oct. 
9th, 1868, Jan. 11th, 1800, Jan. 30th and April 3rd, 1869, 
amounting in all to $2,100; it may be, I paid him part in 
money, or it may be had notes in bank which I took up for 
him by direction of Mr. Swepson, but all of which was charged 
to this account. Of the charges against B. Laftin, Oct. 6th, 1868, 
$500, and Nov. 1st, 1868, $265. The latter was, I think, 
placed to his credit in bank by me by direction of Mr. Swep- 
son. I cannot remember the other. In regard to the items 
charged against J. II. Harris, Dec. 11th, 1868, Jan. 13th, 
1869, Feb. 1st, 1860, and Feb. 27th, 1868, amounting in all to 
$7,500, to the best of my recollection, I paid some portion of 
this amount in money, but under what circumstances, and how 
much I do not remember. Charges against A. J. Jones. Dec. 
11th, 1S6S, March 8th, 1S69, and March 29th, 1869, total 
$10,000, I know nothing of. Charges against James Sinclair, 
Jan. 28th, 1S69, March 29th, 1S69, May 28th, 1869, and June 
16th, 1869, amounting to three thousand five hundred dollars 
of the first item of three hundred dollars-, Jan. 2Sth, and of 
March 29th, of two thousand five hundred dollars, I do not 
remember anything of. The item of one hundred dollars May 
28th, I think was money loaned to him by Mr. Swepson 
The item of Jan. 11th, six hundred dollars, was a note of 
Sinclair's, I think, in bank, which Mr. Swepson did not en- 
dorse, but guaranteed it to the bank and did pay it. The, 
item of five hundred dollars to G. Z. French, Feb. 9th, 1S69 
was, I think, money handed to him. I know nothing of 
charges June 17th, 1S69, amounting to twenty thousand, nine 
hundred thirteen dollars and seventy-four cents against Estes 
and French. IS or do 1 know anything of the charges of 
March 6th and June 14th, 1S69, amounting to thirteen thou- 
sand dollars, except that I made the charges as in the other 
cases. The charges against J. H. Davis, February 18th, 



i'l' v Document Xo. 11. -moii 

1869, of one thousand dollars. I think was ca.-h loaned 
to him by Mr. Swepson. I know nothing of charge of J 
linst Jl. Eppes, February 18th, 1869, nor of the chai 
against II. Downing, February 24th, I : $4, , except 

that I Mas told to make the charge. I do not remember clear- 
ly about the cbarg linst A. J. Rutjes, $450, February 24th, 
18CC. The eha: . E. K. Proctor, March 9th, 1869, 

$500,1 think was paid on an order from Littlefield, or Mr. 
Bwe . I don't remember which. I know nothing about 
charges against J. C. Abbott, March 29th, June 5th, and Octo- 
ber 3l6t, I s ''''.', amounting to $20,000, beyond the entering ol 
them. Of the charge against T. L. Clingman, I know not].' 
of the first item of $200, April 1st, 1869, except that it was 
charged hy direction. In regard to the item of $500, M 
25th, 1869, Clingmam presented to me a draft of $2,500, 
drawn by Littlefield on Mr. Swepson, which in the absence of 
the latter I declined paying. Mr. Swepson instructed me by 
telegraph, the same day, to pay Mr. Clingman $500 on the 
draft, which I did. As to the item of $25,000, charged to 
Foster, who was the member from Bladen, ray recollection is 
that he and (J. X. French, passed through my room in the bank 
to that of Mr. Swepson, and after remaining there for a short 
time, they went out. and Swepson came to my room, and 
directed me to charge Littlefield with $25,000, as paid t<> ! 
ter. I do not know how the money was paid. In regard to 
charge of $1,000, against John Gatlin, May 14th, 1869, Mr. 
on sent for me, one evening, to cume to the hotel, and 
introduced me to Mr. Gatlin, Mr. .--wepson told me to pay 
Mr. Gatlin, $800, on a note which he held against Littlefield 
for $1,000. 1 went to the hank and paid him the money ami 
charged it accordingly. I know no particulars ot the chart 
against <i. P. Peck,member from Edgecombe,$4,500, June 14th, 
L869, except that I entered the charges. All I know of the 
charge against .1. M. Heck, September 3d, L869, ot litteen 
thousand dollars, is that there was a draft tor that amount, 1 
think, drawn by M. S, Littlefield, on (i. W. Swepson, in favor 



1871-'72.] Document No. 11. 229 

of J. M. Heck, and accepted by G. W. Swepson. The draft 
went to protest, and laid over until I received instructions 
from Mr. Swepson to pay it and charge it to this account* 
which was done. The charge of on 3 thousand five hundred 
and ten dollars, October 16th, 1S69, against J. P. Branch, 
should have been charged against M. S. Littlefield, it being 
borrowed from Branch to pay Littlefield. Upon further 
reflection in regard to the item of twenty-five thousand dollars 
paid to Foster. I remember that Mr. Swepson handed me a 
paper, either a draft or note, the endorsement being in what I 
took to be the handwriting of G. Z. French, and signed by 
Foster, in the following language, ''Pay without recourse, 1 ' or 
something to that effect, and signed by Foster. I do not 
remember the precise contents of the paper. I will say in 
further explanation of my testimony, that in regard to the 
items of this account, which I do not particularly remember, 
I charged them on my book in obedience to the instructions of 
Mr. Swepson. That receipts were not taken for every item, 
but such as were taken, were handed over to Littlefield in the 
settlement between him and Mr. Swepson, in Jersey City. 

Q. When the account was presented to Littlefield, in Jersey 
City, as before stated, did he admit the items to be correct '. 

A. He made no objections, to the best of 1113- knowledge 
and belief, but admitted the items to be correct, I think. I 
do not know whether the settlement between Littlefield and 
Swepson at that time, was a full one, but I understood it to be 
so, relative to the affairs of the Western Division of the W. 
X. C. P. E. Co., 

Q. Do you remember any conversation that took place 
between them at that time? 

A. I do not remember particularly, but my recollection is, 
that the agreement between Swepson and Littlefield at the 
time was that the various items embraced in this account, mak- 
in an aggregate of $211,713.41, was to be charged against the 
Western Division of the W. X. C. P. P. Co., and credited to 



230 Document No. 11. [Session 

(i. W. Swepson as President of said road, in an account cur- 
rent, with that road. 

Q. Did yon know anything of the purchase by Swepson 
and battlefield of the stock in the Deep River Manufacturing 
Company '. 

A. I knew that Mr. Swepson had purchased an interest m 
the property troin Col. Deck. I Bee in exhibit II. made to the 
Woodtin Committee, an item of $2,037.53, and reported as 
investments made under a resolution of the hoard of directors, 
not yet allowed by the company. 

Q. Do you know or have your any information of any agree- 
meent between the Railroad Presidents to contribute ten per 
cent, or any other sum tc secure the passage of any bill or bills 
through the Legislature ( 

A. I may have heard casually that there was such an agree- 
ment but know nothing certain. 

Q. Do you know how Mr. Swepson obtained these bonds for 
the "Western Division of the Western North Carolina Railroad 
from the Treasurer '. 

A. I know nothing special how the bonds were issued except 
that when Mr. Swepson wanted the bonds he would draw them 
from the Treasury i and in his absence 1 would do so, and 
receipt in his name. 

Q; I >o you know whether or not these bonds of the Western 
Division of the Western North Carolina Railroad were given 
to Mr. Swepson in advance of other bonds? 

A. I do not know it as a positive fact. I heard it said, but 
cannot speak accurately on the subject. 

Q. Did Mr. Swepson or yon for him, keep a regular account 
as between him and the W. D. of the W. N. ( ". R. R. Co., of 
money received and paid out on account of said road '. 

A. I kept a regular account against the railroad marked 
exhibit M, in the Woodfin report, as between him and the rail- 
road company, but no others. 

Q. Did yon keep the account with the Florida Railroad 1 

A. I did not keep a regular account with the Road, only of 



1871-72.] Document No. 11. 231 

some lew charges made against the Road. Soutter & Co. 
made many payments for the Road, and they kept the account 
against Mr. Swepson. When Soutter & Co. settled with Mr. 
Swepson, in order to separate these various items in the ac- 
counts and to analyze them correctly, I picked out the items 
that were in Soutter & Co/s account, that were to he charged 
to the Florida account, and in that way made out the account 
against the Florida Railroad. I think I simply made these 
entries upon some sheets of account paper, and did not enter 
them regularly in a book. 

Q. Was the account against Littlefield in which the $241 3 - 
013.41 is charged, a general or special one? 

A. This was the only account kept by Mr. Swepson against 
M. S. Littlefield. 

Q. Was this account ever balanced? If so, how? 

A. It was never balanced. The only credits I ever entered 
were what are mentioned in my statement in account marked 
A, of $16,738.60. 

Q. In how many books were the accounts against Littlefield 
and against the W. N. C. R. I v. kept, and where are these 
books '. 

A. The account against the Railroad Company was kept to 
itself in one book, and those against Littlefield in a separate 
one, if kept in a book at all. When my connection with Mr. 
Swepson ceased, I turned over all books and papers to him. 

Q. Was there at any time any partnership between Little- 
field and Swepson for any purpose ? 

A. I am not aware of any. 

Q. What was the inducement tor Mr. Swepson to sign Lit- 
tlefield's note as security for $1,000, of September 15th, 186S? 

A. I do not know. 

Q. How was the amount ot $18,925.83 turned over oj 
Swepson to Littlefield, made up? 

A. I think it was the amount in hands of Soutter 6c Co-j. 
five thousand two hundred and eighty-three cents, and monev: 



^:;l> Document No. 11. [Session 

in hands of Jas. T. Soutter, ten thousand five hnndredand 

twelve dollars. I do not know how the balance was made up. 

Q. Do you know anything about this bond account marked 
!">, and furnished by Mr. Swepson? 

A. I do not. It was kept by Mr. Swepson entirely, or some 
one el 

Q. Do you know, or have \<>u information, of the bonds of 
the North Carolina Railroad Company purchased by Swepson 
and others : 

A. All I know is, that Mr. Swepson told meon one oca 
that he had bought these bonds at 65 cents., and wanted me 
to come hack after supper and make the caleulati tr him. 

The bonds were delivered that night. Col. Tate and Dr. 
Hawkins, I understood, were interested in the purchase with 
Mr. Swepson. These bonds were sold, from time to time, in 
Raleigh, at from 75 to 85 cents., except $15,000 which I sent 
to New York. Swepson afterwards bought out Dr. Hawkins' 
bonds nsiderable advam e. 

Q. Do you know whether Swepson paid any other money 
than what you have stated in the account filed, or bonds or 
other thing value, to any memberof the Legislature or Con- 
vention, or to any State officer for the purpose of procuring the 
passage ot any bill or ordinance making appropriations to Rail- 
roads, or for any other purpose, or have you any information 
on the subject ; if so state it fully \ 

A. I do not know, and have no information on the 
subject. 

Q. Do you know ot Mr. Swepson or Mr. Littlefield making 
any presents to any member ot the Legislature or Convention. 
or to any officer of the State, alter the passage ot any law- 
making appropriations, or after the purchase of Railroad 

bond- i 

A. I do not. 

Q. Do you know anything more connected with these trans- 
tiona i if so, state it fully '. 



lS71-'72.] Document No. 11. 233 

A. I have answered all I know. If anything hereafter 
occurs to me, I will state it to the Committee. 

G. ROSENTHAL. 
Sworn to and subscribed before the Commission. 



Ashetille, August 22 J, 1871. 

The deposition of G. M. Roberts : 

Q. State ycur connection with the Western Division of the 
Western North Carolina Railroad, and how long- you have 
occupied your present office ? 

A. I am secretary and and treasurer, and have been so since 
the 15th of October, 1868. the time of the organization of the 
Western Division. 

Q. State all you know of the organization of the said 
Western Division of said road, and all you know as to sub- 
scriptions for stock in said company, by whom taken, and 
how and when paid, also as to the letting of contracts for the 
building of said road, or any part thereof? 

A. On the loth of October, 1868, at a meeting of the com- 
missioners, to wit : George W. Swepson, R. M. Henry, 
George W. Gahagan, M. S. Littlefield, James II. Rumbough, 
G. M. Roberts, C. May bin, George W. Dickey, N. W. Wood- 
fin, A. T. Davidson, R. F. Simonton, Doctor Samuel L. Love, 
who had been previously appointed to open books of subscrip- 
tion to the stock of said company, the said commissioners 
reported that three thousand and eighty shares, of one 
hunhred dollars each, had been subscribed for by the follow- 
ing persons : J. C. Abbott, 5 shares ; Geo. W. Gahagan, 5 
shares ; J. H. Rumbough, 5 shares ; J. R. Amnions, 5 shares ; 
A. T. Davidson, 5 shares ; S. McD. Tate, 5 shares ; A. S. 
Merrimon, 5 shares; J. H. Merrimon, 5 shares; M. S. Little- 
held, 2,000 shares ; W. W. Rollins, 5 shares ; G. M. Roberts, 
5 shares ; G. W. Dickey, 5 shares : R. M. Henry, 5 shares : 



234 Document No. 11. [Session 

R. F. Simonton, 5 shares; Z. 13. Vance, 5 shares ; T. L. Cling- 
man, 5 shares; Geo. W. Swepson, 5 shares ; Hugh Reynolds, 
1,000 shares. A committee, consisting of Gen. R. M. Henry, 
Geo. W. Swepson, Esq., and Samuel L. Love, was appointed 
to examine the books of subscription returned by the com- 
missioners, who reported that the above amount of stock had 
been subscribed, of which five per cent, had been paid in. A 
resolution was also adopted at the said meeting, instructing 
tin.- committee "to declare that all stock subscribed, on which 
5 per cent, had not been paid heretofore, are at this time 
void " 

Immediately after the adjournment of the meeting of com- 
missioners, a meeting of the stockholders of the said company 
was held, at which all the above stock was represented by the 
stockholders, and, among other thing the following gentle- 
men were elected directors on the part of the individual 
stockholders : Hon. A. T. Davidson, Gen. T. L. Clingman, 
Gr. M Roberts, and Jas. H. Merrimon. Immediately after- 
wards, a meeting of the directors of said road, to wit, the four 
above named on the part of the individual stockholders, and 
the following persons appointed by the Governor on the part 
of the State, to wit, J. C. Abbott, G. YV. Swepson, G. W. 
Gahagan, <i. W. Dickey, 11. M. Henry and J. 11. Amnions, 
was held, and the organization of the Western Division com- 
pleted by the election of George W. Swepson President, G. 
M. Roberts as Secretary and Treasurer, and Major Jas. C. 
Turner as Chief Engineer. The live percent, of the subscrip- 
tion of the individual stockholders was paid to the said Swep- 
M.ii in money by all except Littlefield and Reynolds, and as to 
them, Swepson remarked that they had given him their drafts 
for their subscriptions, which he had taken as money. None 

of this five per cent, came into the hands of the treasurer. 

In the meeting of the commissioners before spoken of, it 
was proposed by Mr. Woodfin that persons along the line of 
the road be allowed to subscribe for stock and pay for it in 
work on the road without requiring the cash advancement of 



1871-'72.] Document No. 11. 235 

five per cent. This was rejected by the commissioners and 
the before mentioned resolution adopted.. 

At the above mentioned meeting of the directors, the chief 
engineer was directed to survey the route for the said road 
to Ducktown, at or near the Tennessee line, and from Paint 
Rock at or near Asheville. It was further ordered, on motion 
of Gen. Clingman, that the President and Chief Engineer be 
authorized to let out to contractors the whole of the said read 
forthwith, "upon condition, nevertheless, that the right is 
reserved to relet the whole, or any part of the work, at any 
time thereafter that they may see fit." 

It was further ordered that books of subscriptions be again 
opened to receive subscriptions to stock on the same terms. 
Afterwards, about the 4th day of May, 1869, the President, 
Mr. Swepson, reported to me that M. S. Littlefield had sub- 
scribed for 11,000 shares, Robert R. Swepson for 5,961 shares, 
Henry Swepson for 2,920 shares, A. H. Jones for 5 shares, 
and the following persons for 1 share each, viz : M. J. Fagg, 
L. H. Smith, L.M. Welch, W. A. Smith, J. A. Campbell, 
J. G. Colgrove, Ashley Mull, Christopher Happoldt, J. W. 
Berry, Allen Berry, W. A. Collett, L. M. Duckworth, D. B. 
Mooney, J. J. Beach, Thomas Seals, Jas. M. Smith, R. W. 
Britton, Jeremiah Smith, S. E. Poteat, Ephraim Abbee, 
Nicholas Hoffman, William Roper, Joseph Benfield, I). E. 
Browning, Joel Cloud, Thomas Neal, F. D. Erwin, J. F. 
Patterson and L. A. Taylor. 

The Buncombe Turnpike Company turned over all its pro- 
perty north of Asheville, and its franchise to the said Western 
Division and received therefor four hundred shares of stock 
and one thousand dollars in money, under the provision of an 
act of assembly for that purpose. 

These subscriptions for stock as above reported by the Presi- 
dent were entered on the stock book of the company for the 
persons and in the sums above named, and the Buncombe 
Turnpike Company was also entered as a stockholder to the 
amount ab<3ve?aid. Nothing was paid by any of these subscri- 



236 Document No. 11. [Session 

- for stock to the Treasurer on account of their subscription. 

In the spring of 1S71 A. M. Alexander subscribed for five 
shares ot stock, and C. M. McLoud, W. P. Dunovant and T. 
F. Davidson subscribed for one share each. These parti 
each paid his live per cent, on the stock subscribed for by him 
to the Treasurer. So far as I know there were no other pay- 
ments made on the stock except 'hose that I have mentioned 
in this answer. 

] do not know to whom the original contract for building the 
road was given or the terms. As Treasurer of the company, 1 
have made payments to several persons for work done on the 
road, which payments were made under the certificate of the 
chief engineer that the work had been done according to con- 
tract with these parties, and also under the direction ot the 
board ot commissionres appointed by the Legislature and 
known as the ""Woodfin Board." I am informed that the 
contracts were awarded to these parties under bids made in 
wer to an advertisement by the chief engineer for that 
purpose. These were actual contractors living on the line of 
the road and in Virginia and Tennessee. At a meeting of the 
directors of the company held at Salisbury on the 17th of 
Dei .. L868, it was stated by Swepson, the President, that 

the drafts given by Littlefield and Reynolds tor the five per 
cent, on their stock which was accepted by him as cash had 
not been paid. And in the list of stockholders made up by 
Swepson in May, 1869, and entered upon the hooks of the 
company at a meeting of the stockholders there held, the name 
of Reynolds as a stockholder was omitted, and the nann 
the other additional stockholders mentioned above were in- 
eluded. At a meeting of the stockholders held in Asheville 
on the l-'-th of October, 1869, Swepson reported to the meet- 
ing that the live per cent, had been paid by Gen. Littlefield 
all the stock subscribed for by him. 

Q. J)id you have any conversation with G. W. Swepson in 
the latter part of the .summer or fall of 1SG9, in relation to the 
sale ot North Carolina State bonds issued tor the benefit of the 



lsTi-72.] Document No. 11. 237 

company of which he was President \ If so, state the sub- 
stance of such conversations. 

A. I arrived in New York in 1869, the day after the gold 
panic. Not long after my arrival I had a conversation with 
Mr. Swepson about the sale of the bonds, in which he stated 
that he had not then sold said bonds issued for the benefit of 
his company. Afterwards, in the fall of 18G9, at a meeting 
of the stockholders of the company, held on the 13th of Octo- 
ber, I heard Mr. Swepson again say that he had not sold the 
said bonds. 

Q. State how much money you have received as treasurer 
of the company, and from whom it was received? 

A. I received from Major J. C. Turner, Chief 
Engineer, $ 3,898.37 

From G. W. Swepson, President, 18,500.00 

From M. S. Littlefield, President, 90,431.74 

From the '* Woodfin Commission," 117,077.06 



Total, $259,907.17 

Included in this sum are 49 bonds (first mortgage) of the 
Wilmington, Charlotte & Rutherford Railroad Company, the 
par value of which were §1,000 each, which were paid to the 
contractors at fhe cash value of $32,508.00. The whole of 
the moneys received by me have been paid out in discharge 
of the liabilities of the company, and about $80,000.00 remains 
still due and unpaid. 

Q. Po you know, or have you heard of any State bonds, 
money, or other thing of value being used by any one to in- 
Huence the Legislature or Convention, or any officer of the 
State government, or any officer ot a railroad in which the 
State has an interest, in their official conduct? 

A. 1 know nothing of the sort myself, and have heard 
nothing except the general rumor. 

Q. Do you know of any State bonds belonging to any rail- 
road having been used by any person to his own advantage ? 



23S Document No. 11. [Session 

A. I heard Col. K. W. Pulliam bj y that Kooper, Harris & 
Co., of New York, had borrowed from (r. W. Swepson, Pres 
ident, a certain amount of bonds, 1 think ninety, giving their 
obligation to return them at some time after the borrowing. 

Q. What was the general reputation as to solvency of the 
individual stockholders reported by Swepson to the stock- 
holders' meeting in May, 1SG9? 

A. I do not know the reputation as to solvency of several 
of the smaller stockholders, but those that 1 know were re- 
garded as solvent. I did not know anything of Littlefield's 
means. Robert Swepson was regarded as solvent and R. M. 
Henry as insolvent. 

Q. State what transfers, if any, have been made of the stock 
of battlefield, Robt. II. Swepson and Henry & Swepson, also 
file a certified copy of your stock book \ 

A. I file here a certified copy of the stock book, and the 
amount owned by each individual, showing also the transfers 
of the stock mentioned, with other explanations as to the .sub- 
scriptions for stock. 

Q. Were you in New York, July, 1869, and did yen return 
from there to Asheville, for the purpose of procuring the pas- 
sage of a resolution by the Board of Directors, authorizing the 
President, Mr. Swepson, to make a sale of the State bonds 
b.-ued to his road, and invest the proceeds thereot; if yea, 
state all the circumstances of the transaction ? 

A. In June, 18G9, I received a despatch from G. W. Swep- 
son, President, then in New York, to come on at once. I 
started immediately, and met him in Baltimore. He ordered 
me back to Asheville, as well as 1 remember, with a letter 
to General Clingman, ordering a meeting of the board 
immediately to adopt a certain resolution which he had drawn 
and given me. I returned to Asheville; the meeting was 
called on July 20th, and the resolution which J had brought, 
or one the same substance, was adopted, a copy ot which is 
given in the testimony of A.T. Davidson. I returned to New 
York immediately with a copy of this resolution which waa 



1871-72.] Document No. 11. 239 

passed, also with a copy ot a resolution passed, Dec. 16th, 
186S. I took with me the seal either this trip, or on a previous 
one, according to the direction of the President. 

Q. What reason did Mr. Swepson give for desiring the passage 
of the resolution, July 2d. 1SC9 % What was said by you to 
the meeting of the Board on that subject? 

A. He stated to me, in Baltimore, that he could not nego- 
tiate the bonds without written authority from the Board of 
Directors, and under the seal of the Company. I stated this 
to the Board in their meeting, as well as I remember. 

Q. Did he not direct you to bring with you or send a cer- 
tified copy of the resolutions passed December, 1869, at 
Salisbury, N. C. ? 

A. My recollection is that he did. 

Q. Had Mr. Swepson sold any of the bonds previous to that 
time, July, 1869, and what did he say to you on that subject \ 
A. At that time I knew nothing of the sale of any of the 
bonds. Mr. Swepson did not tell me anything of the sale, but 
I have since learned that Mr. Swepson had at that time dis- 
posed of some of the bonds. 

Q. Was there not much delay in letting out the contracts 
for the road, and if so, state the reasons therefor ? 

A. There was great delay in writing out the contracts for 
the reason that the President alleged that in the unfavorable 
state of the market and the difficulty of getting money, the 
bonds could not be sold to advantage, so as to raise money for 
advancing the work, and the President objected to pressing 
the work at that time, giving above reason. 

Q. State all the circumstances which you know connected 
with the election of Gen. Littlefield as President of the Itoad. 
Was there any understanding or agreement to that effect made 
by any parties in New York ? If so, what, and when was there 
any caucus on the subject in Asheville before his election \ it 
so, what was done thereat ? 

A. I know of no such understanding in New York, except 
.that G. W. Swepson stated he would not be candidate for the 



-1" Document No. 11. [Session 

Pr< ; the Road. After arriving at Aaheville, I heard 

Littlefield state to a number of .stockholders just before the 
election, that the work on the Road had not been vigorously 
prosecuted, and if he was elected President the work should 
be pushed to early completion. This conversation was in the 
office at my store, at a called or accidental meeting of a num- 
ber of the stockholders and directors oi the Company, and 
before the meeting of the stockholders took place. I do not 
think that Mr. Swepson or Col. Davidson, or Gen. Clingman 
were present at this meeting. It was then determined who 
should be elected directors and who should be President. The 
election of Littlefield was opposed by Gen. Clingman, Col. Da- 
vidson and Mr. Woodfin. Gen. Clingman and Col. Davidson 
attempted to prevent the election of Littlefield and for that 
purpose urged the names of Messrs. Gahagan, Dickey, Rollins 
and probably of some other party. 

Q. State the circumstances connected with the passage of 
the resolution at the meeting of the stockholders in October, 
1SG9, appointing a committee to settle and examine I 
accounts of the President. 

A. I remember that during the first annual meeting held in 
Asheville < October, 1869, that Gen. T. L. Clingman made a 
motion about as follows: " That a committee be appointed by 
the chairman to settle with the former President, G. W. 
Swepson, whereupon one or two was mentioned as apart of 
-aid committee, when they refused. The chair then men- 
tioned that he would give in the names .if those he would ap- 
point for the Secretary, which was done after the adjournment 
of the uniting, by giving in the name ot Jos. Keener, and S. 
P. Cummins. More than once during the meeting General 
Clingman asked that the committee be appointed. The Presi- 
dent replied each time that lie would do bo. The committee, 

however, was not appointed or their names handed to me 
until alter the adjournment of the meeting, and after Little, 
held and Swepson had left for New York. I learned aft. r- 
wards thai the two commissioners leit with Swepson and J. it 



1871-72.] Document No. 11. 241 

tlelield, and went with tlicni to New York to make the settle- 
ment there. I do not remember to have seen the commission- 
ers after their names were given me. 

Q. State anything further which you may know connected 
with the objects of this investigation ? 

A. I know nothing further that I remember. 

G. M. EOBERTS. 

Subscribed and sworn to before the Committee this 30th 
day of August, IS 71. 



August 23, 1871. 

The deposition of E. W. Eulliam : 

Q. Where did you reside in the summer of 1S68, and the 
winter of 1S6S-69, and what business were you then engaged 
in? 

A. I resided in Ealeigh, .N. C, and was the Eresident of 
the Raleigh National Bank. 

Q. State whether or not any money, or anything of value, 
passed from Gen. Littlefield or George W. Swepson to any 
member ot the then Legislature, or any other officer of the. 
State, either directly or directly ? 

A. After the appointment of the directors on the part of 
the State tor the North Carolina Railroad Company, and a few 
days before the general meeting of the stockholders of that 
road in the summer of 1869 Gen. Littlefield purchased of me 
20 shares of the stock of said railroad company and directed 
me to have them transferred to Mr. Welker, Senator from 
Guilford and Alamance counties, and who had just before 
been appointed one ot the directors on the part of the State 
in the said company. I did so and sent Mr. Welker the cer- 
tificate for the stock, and he acknowledged the receipt of it. 
Gen. Littlefield paid me 8500 for the 20 shares. I know of 
no other instance of any member of the Legislature or any 

16 



242 Document No. 11. [Session 

officer of the State receiving any money or anything of value 
from General Littletield or Geo. W. Swepson. I know that 
Geo. W. Swepson had frequent private interviewee with vari- 
ous members of the Legislature in a room which he occupied 
in the Raleigh National Bank, at which interviews Littletield 
was occasionally present. What occurred in these interviews 
I do not know. 

Q. State all you know about the purchase of Florida Rail- 
road stocks or bonds by G. TV. Swepson, the time when, the 
price paid, and out of what funds the money was paid, and 
whether the purchase was made for Swepson individually, or 
tor the benefit of the Western Division of the Western N. C. 
railroad ? 

A. Sometime in the early part of the year 1869, I met in 
New York with Mr. Swepson and Col. Houston, of Florida, 
who had become the agent of Mr. Swepson and myself in that 
State. Upon consultation, Col. Houston was authorized to 
purchase the first mortgage bonds of the Pensacola and Geor- 
gia railroad to the amount of between six and seven hundred 
thousand dollars par value of said bonds from parties in Now 
York, who then held most of them, lie was authorized to pay 
not exceeding 50 cents on the dollar for these bonds. Col. 
Houston soon afterwards made a purchase of the desired 
amount, for which, lie paid, as I understand, between 40 and 
50 cents on the dollar. Up to this time I expected to share 
in the profits resulting from these Florida transactions, but 
shortly afterwards it was made known to me that (Jen. Little- 
field had become the agent and manager of the business, which 
I did not approve, and therefore I immediately withdrew and 
had ii' i further connection with the transactions. These 
bonds were bought on individual account for the benefit ot 
Geo. W. Swepson. who agreed to furnish the money required 
to pay for them. I do not remember that Mr. Swepson told 
me at that time the money had to be raised from a sale of 
North Carolina Railroad bonds issued for the road, of which 
lie was president. Still I knew it. 1 was on terms of inti- 



1871-72.] Document No. 11. 243 

macy with him, and was in consultation with him in all impor- 
tant financial operations. I did not at any time witness the 
payment of money fur these Florida railroad bonds, but knew 
the bonds were bought, and understanding always that they 
had been paid for out ot money received from the sale of X. 
C. Bonds issued as aforesaid, I made no special enquiry about 
it. Mr. Swepson has since told me frequently that they were 
paid for out of funds so raised, and that the entire investment 
made in Florida was in funds so raised. 

Q. State whether the bonds issued for the benefit of the 
Western Division W. N. C. R. R. Company were ever bor- 
rowed by you or any other person from Mr. Swepson, or in 
any way used or disposed of for the benefit of individuals. 

A. I never borrowed at any time a single one of these bonds 
from Mr. Swepson, or any other person, nor were they in any 
way used for my benefit. Soon after these bonds were issued 
to Mr. Swepson, he loaned to the North Carolina Home In- 
surance Company, twenty bonds, to be returned on call to en- 
able that Company to comply with the requirements of their 
charter, and complete their organization for business. I think 
soon after that time, Mr. Swepson also lent ninety of these 
bonds to Hooper, Harris & Co., of New York, and took their 
written obligation to return the same in kind, with interest, at 
some specified time, which I do not now remember. This 
obligation was amply secured by endorsement, W. D. Rankin 
and myself being the endorsers. I was afterwards informed by 
Mr. Swepson that Hooper, Harris <fc Co., had settled with 
General Littlefield for these bonds, after he became President, 
and have since seen the obligation cancelled. I was informed 
by Mr. Swepson that he had deposited bonds as margins for 
several individuals who were speculating in North Carolina 
bonds in New York, and that ho had made good the losses of 
several of these parties. Thomas W. Dewey, ot Charlotte, 
was one of these parties, and I think he also mentioned the 
names ot Rosenthal, P. A. "Wiley, Lallin, and Judge Rodman, 
and perhaps some others as parties for whom he had furnished 



l'44 Document No. 11. [Session 

margins. Mr. Swepson also told me several times that he had 
to pay large sums to procure the passage of the bills through 
the Legislature, and to obtain adjudications in favor of the 
validity of the bonds, but neverwent into particulars or named 
the parties to whom the sums were paid. I know ot no other 
use or disposition of these bonds for the benefit of individui . 

Q. State all yon know of the organization of the Western 
Division of the Western North Carolina Railroad, and all you 
know as to subscriptions for stock in said company, by whom 
taken, and how and when paid, and also for the letting of con- 
tracts for the building of said road, or any part thereof. 

A. "When the bill for the organization of the Western Di- 
vision of the Western North Carolina Railroad was pending 
befo-e the Legislature, it was my understanding, that Swepson 
was to be the President, and he favored the passage of the bill. 
I, together with some others, was appointed Commissioner to 
open books of subscription in the city of Raleigh. During 
the time the books were open in Raleigh, General Littlefield 
subscribed to a large amount of stock, but paid nothing on it, 
the amount, I think, was $1,100,000.00. There were other 
minor subscriptions, but I do not remember who they were 
made by. At the meeting where the organization was effected 
I was not present, but Gr. W. Swepson- was made President. 
From the structure of the bill providing for the organization of 
the Western Division of the Western North Carolind Railroad, 
it was necessary that the work should he put under contract 
along the whole line before the bonds could be issued by the 
State Treasurer. In order to meet this requirement, M. S. 
Littlefield became the contractor for the whole work. At an 
adjourned meeting of the stockholders held in Asheville about 
June 1st, 1869, for the purpose of putting the work under 
actual contract, contracts were informally awarded to various 
parties who gave no written obligations to pay for the work 
expected to be done at any specific manner, nor did the Kail- 
road authorities give any written obligation to pay for the work 
expected to be done at any specified time. Mr. Swepson was 



1371-72.] Document Xo. 11. 24:5 

present at this meeting, but General Littlefield -was aot. There 
was nothing paid to the Commissioners in Raleigh on the 
stock there taken, and I do not know when, or in what way, 
any part of the stock was paid for, if any payments were made. 

Q. What was the reputation of Littlefield as to solvency, at 
the time he subscribed for stock and took the contract for build- 
ing the road ? 

A. Being President of the Bank, it became my duty to en- 
quire into the pecuniary condition of every man who proposed 
to do business at the Bank, Gen. Littlefield became a dealer 
by making deposits, from time to time, which he drew out as 
other dealers were in the habit of doing, but when he proposed 
to make a formal loan of the Bank, which he did at the time 
he purchased the Standard office of W. "VV. Holden, then 
Governor of the State, his application -was rejected upon the 
ground that he owned no property and controlled no money 
belonging to himself or others;, that would justify the Bank in 
making a loan to him. The rejection of the application was 
approved by the Board of Directors of the Bank, including G. 
W. Swepson who was absent at the time the application was 
made, but on his return expressed his decided approbation of 
the course of the officers of the Bank. This rejection was also 
known to Gov. Holden. At the time mentioned in the ques- 
tion Littlefield was generally regarded as an adventurer and 
without any means whatever. 

Q. Did you have any conversation with Mr. G. W. Swepson 
in regard to the sums to be paid to procure the passage of bills 
through the Legislature issuing bonds in favor of the Railroads? 
If so, state the substance of such conversation ? 

Q. In conversations, held from time to time, with Mr. Swep- 
son, he has told me that there was a general understanding 
and agreement among the parties pressing the passage of such 
bills before the Legislature, that ten per cent, of all the appro- 
priation was to be used in payment of expenses in securing the 
passage of such bills, and the impression was made on my mind 



24G Document No. 11. [Session 

by these conversations that Littlefield was the manager of that 
fund. 

Q. State whether or not you had any conversation with G. 
W. Swepson as to the election of Littlfield as President ot the 
Western Division of the Western North Carolina Railroad I 
If so, state the substance of it ? 

A. During the progress of the meeting at which Littlefield 
was elected President, I received intimations in advance of 
the election that Littlefield would probably be made Pres- 
ident. I thought that Mr. Swepson himself favored the 
movement. I also thought that he had it in his power to pre- 
vent his election. I therefore had an interview with Mr. 
Swepson, in which I told him that Littlefield was wholly 
irresponsible and unprincipled, and that his appointment as 
President would be disapproved of by the whole community, 
and that every citizen in Western North Carolina who knew 
his character would reprobate it, and that it would he the 
ruin of the road and that it was thought he could prevent his 
election. He told me in reply that his election had been ar- 
ranged for in New York in a caucus composed in part of G. 
M. Roberts, A. H. Dowell and, I believe, W. W. Rollins, and 
that .he could not prevent the election of Littlefield if he 
wanted to. I alsu wrote him a letter strongly remonstrating 
against his election, and joined in another letter, written by 
other citizens, of the same purport. 

Q. I»o you know anything al unit the sale of North Carolina 
State bonds issued for the benefit of the railroads, by the 
Presidents of the railroads, in New York or elsewhere, in the 
summer and fall of 1869 '. 

A. I do not. 

R. W. PULLIAM. 

Subscribed and sworn to before the commission the 23d 
day of August. A. I>. 1871. 



1871-'72.] Document No. 11. 247 

August 24th, 1871, 

The deposition of A. T. Davidson. 

Q. State the position you occupied in the Western Division- 
of the Western North Carolina Railroad Company in lSGS-'GQ ? 

A. I was one of the commissioners in 186S to receive sub- 
scriptions to the stock of the company, and was elected a di- 
rector on the part of the stockholders in October, 1S6S, and 
have continued to act as such up to the present time. 

Q. State all you know of the organization of the said West- 
ern Division of the Western North Carolina Railroad, and all 
you know as to subscriptions tor stock in said company, by 
whom taken, and how and when paid, and also as to the let- 
ting- of contracts for the building of said road, or any part 
thereof? 

A. The organization took place in the town of Morganton, 
on the 15th of October, 1S68, by a meeting of the Board of 
Commissioners who had charge of the books of subscription, 
who reported 3,0SO shares of stock subscribed, on which 5 per 
cent, had been paid in accordance with the resolution ol the 
commissioners, to wit, $15,400.00. The books of subscription, 
the reports and the funds in the shape they were collected by 
the commissioners, were all turned over to the stockholders. 
A meeting of the stockholders was then held on the same 
day and the following persons were elected directors on the 
the part of the stockholders, to wit, A. T. Davidson, Thos. L. 
Clingman, G. M. Roberts and Jas. H. Merrimon. The direct- 
ors met on the same day and elected G. W. Swepson Pres- 
ident, Jas. C. Turner Chief Engineer and G. M. Roberts was 
made Secretary and Treasurer, either temporarily or per- 
manently, I forget which. Five per cent, was paid on 80 
shares in currency. M. S. Little-field paid his 5 per cent, on 
2,000 shares by a draft, payable to the President, of $10,000, 
and Hugh Reynolds paid his 5 per cent, on 1,000 shares by a 
draft in favor ot the President, both of which I, as a director, 
then understood Mr. Swepson accepted as cash. The balance 



248 Document No. 11. [Session 

of the stock I understood was afterwards taken by Littlefield, 
by Geo. "W. Swepscm for R. B. Swepson and by Henry & 
Swepson : whether any thing- was ever paid on this stock I 
don't know. It was understood that a contract for building 
the whole road was made in Raleigh with Littlefield, or Lit- 
tlefield and company, or with some other parties. I suppose 
the contract, which was in writing, will show. I do not know 
the details of this contract or the circumstances under which 
it was made. It was understood to have been made between 
Swepson, the President, and Gen. Littlefield, for the purpose 
of obtaining the bonds from the State by an apparent com- 
pliance with the act of Assembly which required the whole 
road to be put under contract before the State Treasurer could 
issue the bonds. This contract was never, to my knowledge, 
submitted to the Board of Directors for their action or ap- 
proval. At the meeting of the directors above mentioned, a 
resolution was adopted authorizing the President and Chief 
Engineer to let to contract the building of the whold road, 
reserving to the company the right to relet the whole or any 
part the work of whenever they should think proper to do so. 
Afterwards a large portion of the work was relet to other and 
bona ji,l contractors who went forward and about $400,000 
worth of work. 

Q. State the general reputation as to solvency ot M. S. Lit- 
tlefield and It. M. Henry at the time they made subscriptions 
to the stock of the road '. 

A. Their general reputation was that they were wholly irre- 
sponsible and insolvent, and were not good for the sums sub- 
scribed. 

Q. State by what means the President of the Poad procured 
the State bonds to be issued for the benefit ol this Poad \ 

A. I have no knowledge on the subject, as no report Mas 
ever made to the directors. 

Q. "Was there any resolution passed by the Board ot Direc- 
tors directing how, when, where, by whom and at what price 



1871-72. Document No. 11. 2±0 

bonds should be sold \ If so, give the date and substance of 
sucli resolution or resolutions ? 

A. On the 16th December, 1808, at a meeting of the Direc- 
tors, held in Salisbury, the following resolution was passed : 
" That the President, G. W, Swepsou be authorized, in his dis- 
cretion, to sell and invest the proceeds of a portion of the 
State bonds from time to time in United States and other good 
securities, so as to avoid if possible having to sell any bonds in 
an unfavorable condition of the money market to meet de- 
mands of contractors and others who have claims against the 
Company, and he is authorized to consult as a financial com- 
mittee of directors T. L. Clingman, W. \V. Rollins and G. W. 
Gahao-an." At a called meeting of the Board of Directors 
held in Asheville, on the 2d of July, 1SG9, the following reso- 
lution was adopted : " Resolved, That the President of the 
Company be and the same is hereby authorized to sell any 
securities of the Company, or to pledge them for loans, when 
in his judgment the interests of the Company require it, and 
in case such securities be sold, he is authorized to invest the 
proceeds in such way as he may deem best." It was further 
resolve! that the secretary furnish a certified copy of this reso- 
lution and of the resolution above copied to the President un- 
der the seal of the Company. Mr. Swepson, the President of 
the Company, was not present at this last meeting, being then 
in New York. The resolution was presented by the Secretary 
and Treasurer, G. M. Roberts, who came from New York for 
the purpose of having this meeting and procuring the passage 
■of this resolution. And it was stated by him in the meeting 
that the President could not negotiate the sale of the bonds 
without this resolution, which was then adopted on his recom- 
mendation of the President through him. The Secretary im- 
mediately returned to New York with this resolution properly 
•certified. No other business was done at this meeting of the 
Board. 

Q. Did the President ever make any report of the disposi- 
tion of bonds made by him to the board of directors ' 



DoCTTMETN'T N©, 11. [SeS8iOI> 

A. lie made no other report than that published in the 
proceedings of the meeting of the stockholders, dated, "Presi- 
dent's office. Asheville, N. C, October 13, 1869, a copy of 
which is herewith filed, marked " A." In wnieh nothing is 
said about any sale of the bonds having been made. 

Q. Why was not a report demanded from the President of 
the disposition he had made of the bonds, either by the stock- 
holder.- in their meeting, or by the directors who held a meet- 
ing immediately afterwards '. 

A. Because we understood from the report referred to above 
that no disposition of the bonds had been made. "We did not 
regard the report as then made as satisfactory, but thought that 
it settled the question as to the sale of the bonds. 

Q. State all the circumstances connected with the election 
: M. S. Littletield as President ot the "Western Division of 
the "We&tern North Carolina Railroad. 

A. Just before the meeting of stockholders, in Asheville, in 
October, 1869, Mr. Swepson came to Asheville and announced 
his purpose not to accept of the presidency for the next year, 
and gave as a reason that he had taken hold of the road wiih 
a view of building it. and his management had been a good 
deal censured and he was suspected of improper conduct in 
conducting the affairs of the company by the Western people, 
that he had done all he could, and intended to wash his hands 
it and let them build it themselves. Several persons, among 
them Mr. Woodfin and myself, urged him not to decline and 
got up a memorial, which was signed by many persons, request- 
ing him tu continue to act as president of the road. He 
dined to do so. The meeting ot the stockholders was then 
held and the following persons were elected directors, t<>-wit : 
d. W. Swepson, (t. W. Dickey, J. R. Amnions, R.M. Henry. 
Jos. C. Abbott, M. S. Littlefie'ld, T. L. C'lingman, W. W. Rol- 
lins, A. II. Jones, G. W. Gahngan, A. T. Davidson and Jos. 
Keener. A blank proxy to represent the stock of the State in 
this meeting Mas sent by the Governor to Mr. Swepson to be 
filled up by him with the name of some suitable person, accom- 



1871-'72.] Document No. 11. 251 

parried by a letter from the Governor to Mr. Swepson, in which 
the Governor expressed his confidence in him, and saying that 
while he desired proper persons to be elected directors, yet it 
was expected the vote of the State would be cast in the interest 
of the party. Mr. Swepson inserted in the proxy the name of 
G. W. Gahagan who represented the State's interest in the 
meeting and in whom the Governor also expressed his confi- 
dence in the said letter. I had heard before the meeting of the 
stockholders from Mr. Swepson, that Gen. Littlefield would 
be his successor as President, and had expressed my decided 
disapprobation ot it, and said it would be the ruin of the road. 
After the stockholders' meeting was over a meeting of the 
directors was held in which Mr. littlefield was elected Presi- 
dent, Gen. Clingman and myself, and I suppose Gen. Little- 
field, voted for Mr. Swepson, the other nine voting for Little- 
field. Before the meetings ot the stockholders and directors 
took place, I had endeavored to make an arrangement with 
several persons by which either Gahagan, Dickey, Jones or 
Eollins might be elected President, but could not succeed. I 
knew that a radical would have to be elected and preferred 
either of the above to Littlefield, expressing my entire want of 
confidence in Littlefield and that the country had no confi- 
dence in him. Before the meeting of the stockholders a caucus 
was held by a number of the radical members of the old board 
of directors and others who were elected on the new board, in 
which it was determined, as I understood, who should be 
elected directors, and that Gen. Littlefield should be made Pre- 
sident, the possession uf the State's proxy with the stock they 
held giving them complete control ot the election. 

Q. Did you at any time act as counsel for Mr. Swepson, or 
for the Western Division of the W. N". C. Pi. R. If so, state 
when and by whose appointment ? 

A. At the time of the organization of the road at Morgan- 
ton in October, 1868, Mr. Swepson retained me as counsel 
for the road, and also requested me to retain X. W. Woodfin, 
Esq., as counsel for said road, which I did. After the election 



252 Document No. 11. [Session 

of Gen. Littletield lie continued me as counsel and I have been 
employed also by Mr, Rollins the present president. 1 have 
been attorney tor Mr. Swepson in his private affairs since 
1SG0, and am yet. 

Q. Did you ever have any conversation with Mr. Swepson 
in regard to the means used to procure the passage of bills 
through the Legislature for the benefit of railroads, or to pro- 
cure decisions of the courts establishing theirj validity. If so, 
state the substance of such conversation \ 

A. The subject has been mentioned in several conversations. 
Mr. Swepson always denied to me that he had paid to any 
member of the Legislature directly, any sum to induce his vote 
or influence, but he said that it cost him a very large sum to 
procure the passage of the bills and favorable decisions of the 
courts, that he had never bribed any member of the Legisla 
ture, that the money all went through Littlefield's hands, and 
if any bribing of members was done, he, Littlefield, did it. 
Swepson said further, that he was in New York and heard 
with others that the decision of the Supreme Court had been 
made adverse to the validity of the bonds, that he got a Mr. 
Porter of New York to come to Ilaleigh to get the case re- 
argued, and that he got the decision reversed and the validity 
ot the bonds established^ and that it cost a very large sum to 
do it, and he claimed that the company was under obligations 
to him for securing to it the bonds in this way. lie told me, 
during the session of the Legislature of 1SGS-9, there was no 
money in the Treasury of the State with which to pay the 
members, and that he had allowed the members, as Director 
of the "Raleigh National Bank," to anticipate their per diem, 
and that many of them received money at the bank on account 
of said pay. During the said session of the Legislature I wa- 
in Raleigh and while 1 was in the '-Raleigh National Bank" 
dames II. Harris a colored member of the Legislature came in 
and went into a private room with Mr. Swepson, after he re- 
tired Mr. Swepson stated to me that Harris and his friends 
were pretty hard up tor money and that he had said to Harris 



1871-72.] Document No. 11. 253 

that lie and his friends could come there and draw money in 
anticipation of their pay as members of the Legislature. 

Q. "Was the letting of the contract to build the road to Lit- 
tlefield, or the other parties mentioned by you before, ever 
regarded by the board of directors as a lon,a fide contract 
which was intended to be executed, or as a mere formal com- 
pliance with the act of assembly which prohibited the issuing 
of the bonds until the whole road had been let to contract, 
and with the expectation that the road would have to be re-let 
to other and real contractors. 

A. I regarded it as a mere nominal contract to comply with 
the 7th section of the act of Assembly of August 10th, 1S68, 
and I think it was so regarded by a majority of the members 
of the board, and it has been so treated by the board in re-let- 
ting the road. The contract was signed and filed in the office 
of the company, but at what time I do not remember. 

Q. Were the contracts for the building of the road made 
with the last contractors fair and reasonable or otherwise '. 

A. From my knowledge of building railroads, and of gen- 
eral work, I think the} 7 were at fair and reasonable rates. 
There is dissatisfaction in regard to the estimate returned to 
the office by the chief engineer, and the present board of 
directors ordered by resolution have a re-estimate of the work, 
and that further payments be withheld until this was done. 

Q. Do you know or have you heard of any other matter or 
thing in any way connected with the object of this investiga- 
tion I 

A. My means of information in regard to the operations of 
the company, outside of the board of directors, have been very 
limited. I have not been connected in any way with the sales 
of the bonds or procuring them to be issued, and have never 
seen one of them. I have heard a great many rumors, but 
know of nothing material that I have not stated. 

A. T DAVIDSON. 

Subscribed and sworn to before the Commission, the 25th 
day of August, 1871. 



254 Document No. 11. [Session 

The deposition of J. L. IIexky : 

Q. State all you know of the transfer of any portion ot the 
stock of M. S. Littlefield in the "Western Division of the West- 
ern North Carolina .Railroad, or any other stock ? 

A. The transfer on the books dated was made to me 

in New York City on the occasion of Littlefield's departure to 
London, he representing that the amount of five per cent, had 
been paid on the stock so transferred. In the presence of G. 
M. Roberts, Secretary, who referred to the books to specify the 
amount of paid stock, they, Littlefield and Roberts, represent- 
ing that the live per cent, had been paid in checks or drafts 
which had been accepted by G. W. Swepson, the former Presi- 
dent, to the amount of $55,000,00. I distinctly told Littlefield 
that I would not accept hoyus stock, but would represent any 
legal stock on which the five per cent, had been paid. Little- 
field first offered me a proxy to represent his stock in the Com- 
pany, but 1 refused to take anything but an absolute transfer ot 
the above mentioned stock. At a meeting of the stockholders 
held in March, 1ST0, in the City of Raleigh, lor the purpose ol 
accepting as an amendment to the charter the act of the Legis- 
lature oi lSG9-'70, appointing commissioners, there was a trans- 
fer of stock to me made by the President, which was merely 
nominal and for the purpose ot making a quorum for the occa- 
sion. All the above mentioned stock has been transferred by 
me to the President of the company, lor the use of the com- 
pany. The stock of R. M. Henry, 1 have heard him say, was 
subscribed for by Geo. W. Swepson in his name. I have seen 
the transfer made by Col. Littlefield as agent for Gen. Little- 
field, ot the Littlefield stock to Davidson and Rollins. 

Q. Do you know or have you heard of any State Ejonds, 
money or other thing of value being lent or given by Swepson 
or Littlefield to any member of the Legislature or Convention, 
01 to any officer of the State Government '. 

A. I do not know ot anything of the kind and have not 

ird it except by common rumor. 



1871-72.] Document No. 11. 255 

Q. Do you know, or have you heard ot any other matter in 
any way connected with this investigation ? 

A. I do not know and have not heard anything further ma- 
terial. 

J. L. HENRY. 

Subscribed and sworn to before the commission the 25th day 
of August, A. D., 1871. 



The deposition oi T. L. Clingman : 

Q. State all you know of the organization of the "Western 
Division of the Western North Carolina Railroad Company, 
by whom taken and how and when paid, and also as to the let- 
ting ot contracts for the building of said road or any part 
thereof, and any other matter within your knowledge in any 
way connected with the objects of this investigation % 

A. In answer to thejquestion propounded, I have to state that 
while I was passing from Asheville to Morganton, Messrs. 
McDowell & Patton then having a contract, and being at work 
on the road near Swanannoa Gap, gave me a power of attorney 
to represent the stock which they had taken in the "Western 
Division of the "Western North Carolina Railroad. I attended 
the meeting of the Commissioners at JMorganton, who had 
received the different subscriptions of stock, on I think, the 
13th of October, 1868. They decided that they would not 
receive any stock on which five per cent, had not been paid. 
I was not allowed, therefore, to represent the stock of Messrs. 
McDowell & Patton at the meeting. Mr. Geo. "W. Swepson 
requested me to consent fo become a director in the road, saying 
that I could render great assistance in the work. I con- 
sented to become a director and was elected by the stockhol- 
ders' Mr. Swepson subseqently stated to me that lie had se- 
lected me partly because he wished to have one democrat on 
the board. He said that as eight of the directors were repub- 
licans, and he and Davidson and Merrimon were old whig.?, he 



256 Document No. 11. [Session 

thought that there ought to be one democrat on the board, so 
that all parties might bo represented to some extent. The or- 
ganization of the company was effected in the manner its 
records show : and as the company then had no funds Mr. 
Swepson agreed to advance money himselt to start the sur- 
veys. Besides the rive shares of stock owned by each director, 
on which ."> per cent. wa6 paid, there was about three thousand 
dollars I think represented as paid up in like manner. As 
there was a provision in the charter as amended, declaring that 
no bonds should be issued to the company until a contract had 
been made for the whole work, Mr. Swepsun and Major 
Turner, the chief engineer, were authorized to make such a 
contract with a provision that the whole or any part of the con- 
tract might be at any time transferred to other parties. Maj. 
Turner stated this was a common provision in all contracts, 
and according to my recollection it formed substantially a part 
"1' all the contracts subsequently let. Mr. Swepson requested 
me to attend the meeting of the Legislatuie, soon to assemble, 
as he said that additional legislation would be necessary to 
enable the company to execute the work, and my assistance 
would be important, lie also after we'separated. wrote me a 
letter urging me attend at the time of the meeting. I went 
to Raleigh and remained there about three months, and assisted 
the several lawyers. Mr. Swepson engaged in preparing a 
number of bills, and I more frequently acted in connection 
with Judge Merrimon than any ono else, but also was at times 
associated with Mr. Kemp 1'. Battle, Mr. Phillips, and on one 
or two occasions Mr. B. F. Moore was present. Besides mat- 
ters connected with our road, Mr. Swepson had a number of 
other things done. I prepared two bills with much care, one 
tor a sort of mobillier or general corporation. Mr. Battle, I 
remember, acted in perfecting these. There were also bills for 
the sale of the N. 0. Road, which Mr. Merrimon and I 
prepared, ami which were considered by a committee, of 
which Messrs. Osborne and Welker were members. Mr. 
B. F. Moore, I think, was consulted, among other things, as 



1871-72.] Document No. 11. 257 

to whether the two divisions of the road were separate corpora- 
tions. Besides daily consultation about these things, I con- 
versed with members ot the Legislature, chiefly conserva- 
tives. Frequently insidious attacks in the shape of amendments 
from professed friends had to be provided against. One im- 
portant bill was altered materially by the enrolling clerks and 
ratified, with a special tax of one-twentieth instead of one- 
eighth, as it had been actually passed. On cue occasion I 
spoke to Mr. Swepson of a hostile amendment of Mr. Estes' 
which I had difficulty in getting out of the bill, and Mr. 
Swepson said the object of Estes, in his opinion, was to black- 
mail him or get money from him. Mr. Swepson never, in any 
instance, intimated to me that money had been used to in- 
fluence the members of the Legislature, but spoke of certain 
persons as wishing to blackmail him. On one occasion I re- 
member he said, referring to the charges made in the papers 
or circulated about there being a railroad ring, that he had 
done nothing to which exception could be taken, as he had 
merely sometimes lent money to persons and that he did nof 
know what they might or would do with it. He never men- 
tioned the name of any person to whom he had paid or lent 
money as far as I remember. I saw little of Gen. Littlefield 
during that session and had no consultation with him about 
getting through the appropriations for the railroad. Mr. 
Swepson spoke of Littlefield unfavorably ; said he would not 
trust him at all and meant to,have nothing further to do with 
him as soon as he got clear of some matters in which he had 
been engaged previously. During the session I had no 
knowledge of any combination of persons or ring who were 
to be paid except such reports as were occasionally seen in 
the newspapers. I recollect saying to Mr. Swepson shortly 
after my arrival in Raleigh, that I should take no part in any 
transaction except what 1 was willing to have published in 
the newspapers, and I do not remember his ever saying any- 
thing which was calculated to convict him of improper con- 
duct. He seemed anxious for the success of the road, and by 

17 



253 Document Mo. 11. [Session 

his desire I corresponded with persons in Georgia to secure a 
connection with our road in the southwest. He was also 
apparently anxious to get control of a part of the East Ten- 
nessee road for the benefil of ours when finished, On the 
point of the manner in which Swepson got the bonds 
I can state that on reaching Raleigh 1 examined the act 
ot the previous July session under which four millions were 
be issued, and told Mr. Swepson that in my opinion, as 
no special tax had been laid, the act was unconstitutional. 
He seemed surprised, but after consultation with other 
counsel became satisfied. It was understood that those 
bonds should not be sold, but a new act should In- 
passed. I think sometime in December Mr. Swepson got pos- 
session ot them but retained them without sale. He said to us 
at our next meeting at Salisbury about the 15th or ISth ot 
December, that he had complied with the condition of the act 
and had made a contract with responsible parties so as to en- 
title him to receive the bonds from the Treasurer. He did not 
inform me who were the parties nor do I think it was known 
generally to the board of directors. A considerable time after- 
wards, I heard that Col. S. McD. Tate and Gen. Henrv, a 
director, were two of the parties. I am not sure that I heard 
that Littlefield was one while Swepson was president. At a 
later period of the session Mr. Swepson told me that he had as 
a commissioner striken out Col. Tate's subscription because he 
had not paid the 5 per cent, on it. I think it was for $500,000 
and was told afterwards, how long. I do not now remember, 
that Mr. Robert Swepson had taken it. Mr. Swepson repea- 
tedly said that the 5 per cent, had been paid in on all the 
private stock. The last time I heard him state this was in the 
presence of Col. Kumbough just before he went out of office 
as president. After the ratification of the act of Dec. 19th, 
authorizing the issue of four millions in lieu of the four ot July 
returned, Mr. Swepson, but at what time I do not know, got 
the bonds. A later act ratified Jan. 20th, authorized him to 
raise $2,000,000 further. I never heard him speak particularly 



l871-'72.] Document No. 11. 250 

of the manner in which he had satisfied the Governor. lie 
merely stated to the stockholders in general terms that lie had 
complied with the law. The subject of selling the bonds was 
considered at the meeting at Salisbury, Dec. 15th, 1SG8, and 
at the suggestion ol Mr. Swepsou a resolution was passed 
authorizing him to sell portions of the bonds and invest in IT. 
S. bonds or other good securities, so as to be able to meet the 
demands of contractors for pay without being obliged to sell 
State bonds in unfavorable conditions of the market. I then 
regarded it as a wise measure and have not changed my opinion 
on the subject. Mr. Swepson frequently said the bonds ought 
not to be sold until the interest on them could be paid and 
they rose in market. Some time in the spring of 1809, being 
in New York, in conssquence of something I heard, I told Mr. 
Swepson that a certain gentleman of Wall street whose name 
I mentioned, to wit, Mr. Pickrel had said that he had been 
selling bonds largely in February previous. Mr. Swepson 
did not admit it, but denied. On a subsequent occa- 
sion I told him another gentleman, Mr. Osgood, 
spoke of his having sold bonds, he seemed vexed and rather 
put out of humor and did not admit the statement to be true. 
I mentioned there matters to him to afford him an opportunity 
for explanation if he thought proper to give it, and also because 
he had been authorized by resolution to consult as financial ad- 
visers some of the Directors, of whom I was one, as to the sale 
of the bonds I was in fact never consulted by him at any time 
on the subject. At the meeting at Asheville, on the 10th of 
June, Mr. Swepson asked us to pass a resolution to authorize 
him to sell all the bonds, at 50 cents on the dollar. I opposed 
it, insisting that a million or a million and a half only ought to 
be sold so as to keep the work going on for the year, and that 
the rest ought to be held back for higher prices. The bonds 
were then near GO, and a million sold would have given us more 
money than would have been used during the year. In fact, 
when Mr. Swepson went out of office in October, Major Tur- 
ner reported only about $73,000 worth of work done. After 



DoiTMKNT N<>. 11. Se- 

ll good deal of discussion in which I stood alone, the measure 
was abandoned. Xext morning, however, Col. A. T. Davidson 
presented me a paper, signed as he said by all the other Direc- 
tors present at the meeting, advising Mr. Swepson to sell all 
the bonds at 50 and asked me what I would do1 I told him 
positively that I would not sign it, and he said also he would 
not, but subsequently he told me that on account of Mr. Swep- 
son making an earnest appeal to him as his counsel, he had re 
luctantlv signed it. Mr. Swepson seemed anxious about the 
matter, and afterwards in our intercourse he appeared rather 
less cordial and communicative. In fact, on some occasions. 1 
was told that he spoke of certain matters to others and reqnept- 
ed them not to let me know it. After this meeting, and in 
July Mr. Roberts, the secretary, returned from theMorth and 
told us that Mr. Swepson wished a certain resolution passed 
which he presented to us. It authorized the sale of the bonds 
and investment in other securities. I stated in the meeting 
called, that the resolution passed at Salisbury, was sufficient, 
and that it was only necessary to send him a copy. Mr. Rob- 
erts said that Mr. Swepson was very anxious to have that reso- 
lution passed, and after conversation, it wis agreed that as the 
two resolutions were substantially the same it should be adopted. 
During the latter part of the summer and autumn in New York, 
after much conversation and discussion, the several railroad presi- 
dents entered into an agreement to place all their bonds in the 
1 tanking house of Clews tfc Co., for sale at a price to be agreed upon. 
I never saw the paper, and do not know its precise terms as to 
price, Stt. Mr. Swepson said he had not sold any of his bonds, 
and would not till the price rose after the interest was paid. 
Dr. Sloan repeatedly told me that he did not intend to sell 
any of his tor less than 75 per cent, of value. Andrew Jack- 
son Jones assured me that he had sold hone 1 of his, and that 
lie would at any time show them all. Dr. Mott stated that 
his were all 6till in his possession. It was said Col. Cowan had 
sold one million, and I believed others had been sold recently, 
but I could get no positive evidence 88 to the amount, and it 



1871-'72.] Document No. 11. 261 

was supposed not a great many bonds were afloat on the mar- 
ket. After this arrangement had been entered into, I 
became acquainted with Mr. Henry Clews, and at his request 
I gave him a statement of the debts and resources of North 
Carolina, which he circulated extensively. Fully believing 
that Mr. Swepson and the other presidents had the bulk of 
their bonds on hand, I expected that under this arrangement 
after the interest was paid, the price would rise above 7 per 
cent., and came home with this belief. 

At the meeting of October, Mr. Swepson announced his pur- 
pose not to serve longer as president, and in his short state- 
ment to the stockholders, said he had sold two hundred and 
twenty-five thousand dollars worth of the bonds ($225,000) to 
enable Jenkins to pay the members of the Legislature, and to 
pay some of the coupons on the special tax bonds, and requested 
that a committee might be appointed to settle with him in con- 
nection with the new president, Gen. Littlefield. In common 
with most, if not all present, I believed the statement thus 
public!}- made. I moved that the chairman of the meeting, 
Gen. Abbott, appoint the committee. Soon after this motion 
was adopted, Col. Davidson and Mr. Swepson, whose absence I 
had not noticed, come in, and the former offered a resolution 
that Gen. Abbott and another, Gahagan, I think, should be the 
committee to settle with Mr. Swepson. I told him the resolu- 
tion had already been passed. Instead of immediately appoint- 
ing the committee as I supposed he would do. Gen. Abbott 
allowed the day to pass over without his doing it. That night 
I called at his room and asked if he had appointed the com- 
mittee. He replied in the negative, and said unless I declined 
he would have to appoint me as the mover for one. I answered 
that I was perfectly willing to serve, whereupon he replied that 
he should appoint me. The next day passed without his 
announcing the committee, much to my surprise, for I had still 
supposed the settlement was to be made before we adjourned. 
Finally, he said that if the business was through we might ad- 
journ. I rose, however, and reminded him of the appointment 



262 Document No. 11. [Session 

of the committee, and he said lie would give the names to the 
secretary, Mr. Roberts. lie and Messrs. Swepson and Little- 
field went off that evening; and I learned next morning from 
the secretary that Messrs. Keener and Amnions had been ap- 
pointed the committee to go np to New York with the parties 
and make the settlement because the journal of the company 
made nut is entirely in error. I have since been told by Gen. 
Abbott that he intended to appoint Mr. W. W. Rollins and 
myself, but that Mr. Swepson objected^ saying that we were 
not his friends, and that he requested the other gentlemen to 
be appointed. Major Rollins informed me that Gerieral 
Abbott told him the same thing. Until these things occurred, 
I had no apprehension that Mr. Swepson had misapplied any 
of the bonds, but suspected that he might have hypothecated 
some of them and taken them up again, but his failure to settle 
excited my suspicions. 

With respect to the manner in which the bonds were ni2de 
use of, I have to say that I never, myself, owned or borrowed, 
or had the use of any of these bonds, nor did I ever assist any 
one in selling or buying, lending or borrowing, or hypotheca- 
ting any one of these bonds. I have no recollection ot ever 
seeing one of these bonds, except a package of about thirty, 
which Mr. Francis < ):-good, of New York, one day, asked me 
to look at, that I might tell him it they were of the class deci- 
ded to be constitutional. During Mr. Swepson's Presidency, 
I never heard it intimated that any ot these bonds had been 
lent to any person, hut since he went out of office, I have heard 
reports that some of them had been lent out to favored parties. 
With respect to the letting out of the contracts, I thought it 
ought to be done the lstot Apiil. 1st',!*, hut Major Turner, the 
chief engineer, said that the surveys could not he in readiness 
before the 1st of May, and it was atone time decided that they 
6hould be let out at that time, but Mr. Swepson told me that 
he could not attend at Ashcville before the middle of May, 
and it should be done then, and that Turner should advertise 
for that time. "When the advertisement appeared, however, it 



1871-72.] Document No. 11. 263 

announced the lettings for the first of June, and then, as I 
recollect, it was postponed till the 10th ot June, at which time 
the stockholders and many bidders for contracts assembled at 
Asheville. I met Col. Davidson in the office of the President 
of the road one morning, and he said to me with some appear- 
ance of concern, "You and I will have to resign ; we cannot 
stay on the board, for they are not going to let out the con- 
tracts.'' Feeling astonished, I enquired what he meant, and 
was told that he had just had a conversation with Mr. Swepson, 
who talked of not letting out the contracts. In a few minutes 
Mr. Swepson came in, and I at once urgently insisted on the 
contracts being all let out and the work pushf d with vigor. 
Mr. Swepson seemed to give in, but suggested difficulties, and 
said he was told the charter would only allow the road to be 
finished in the proportion of one-fourth on the [French Broad, 
and three-fourths on the main line. It had been advertised 
that one hundred miles should be let, of which forty-five were 
on French Broad, and fifty-five on the main line. I told Mr. 
Swepson he had been misinformed, and that I would satisfy 
him. He left us, and Col. Davidson, I remember, said : " I 
am glad vou talked to him so earnestlv. I think the work 
will go on." Soon after I read the charter to Mr. Swepson 
and showed him that it merely declared that the work should 
be prosecuted equally on both lines. He thereupon said : 
" Then there is nothing to prevent the putting all the French 
Broad under contract at once." Major Turner was directed 
to prepare a statement of the bids on the whole hundred miles, 
to be submitted to the directors, and it was decided that no 
work should be let above the enquiries estimated, and in all 
cases to the lowest bidders. A day or two expired while these 
preparations were being made. To my surprise one morning, 
Mr. Swepson said that he must leave ; that Mr. Turner had 
been directed to go on and let out the contracts, and that there 
was no necessity for him (Mr. Swepson) to remain longer. 
After he left I saw Major Turner daily, who seemed to be 
quite busy letting out the contracts to various persons. After 



264 Document No. 11. [Session 

a week or two had passed in this manner, Major Turner said 
that he had let out all the French Broad line to McDowell & 
Drane, except the portions previously allotted to various parties, 
and that all of the main line had been let, except about 
ten miles between Pigeon river and "Wavnesville, which was 
to be held back until he could survey a new line up the river 
which some persons represented as the best ; that Mr. Swep- 
son had directed him to examine it before deciding as to that 
part of the line. Being then satisfied with what 1 was told 
had been done I went off to New York, I had not been long 
there before McDowell and Drane came up and on conversing 
with them about their contract, was surprised to hear that it 
was not settled. I spoke of the matter to Mr. Swepson but he 
would communicate nothing. Soon alter Major Turner came 
up and in reply to my questions, he merely said that there was 
a hitch in the matter. "When urged to explain he said there 
were things he could not tell or was not at liberty to tell. 
When I spoke to Mr. Swepson he would say that the bonds 
were too low in the market to permit him to sell them, ami 
hence there was no money on hand to pay for vigorous work. 
He also said he would soon have a meeting at the Warm 
Springs. At iirst he said in the beginning of August, but post- 
poned the meeting from time to time, until in September he 
said that the annual meeting was so near that a call meeting 
was unnecessary. During the summer and Autumn I passed 
several times between Asheville ami New York, and com- 
plained to Mr. Swepson of the slackness of the work, he said 
repeatedly " Turner is having too much work done, we have 
no money to pay for it, we must wait until the interest is paid 
and the bonds rise, it will not do to sacrifice them at the 
present rate." He constantly promised that in a little while 
lie would have the work pushed with great vigor as soon as 
funds could be realized. From frequent conversations with 
him ami Major Turner, I came to the conclusion that Turner 
was secretly held back by instructions from Mr. Swepson, and 
though I pressed them both trom time to time until they 



1871-72.] Document No. 11. 265 

seemed worried by my urgency, I could get no satifactory ex- 
planation. It was some time in September, I think, that Mr. 
Swepson first intimated a purpose not to continue in the presi- 
dency of the road. While I was urging that the work on the 
road should be pressed faster, he said " I am complained of on 
all sides and I mean to resign and have some one else to do 
the work." I then believed he so spoke because he was vexed 
with my urgency and though he spoke in the same manner 
frequently, yet I never did believe he would resign till the 
time of the meeting when he said, as he sometimes 
•did, that he wished me to succeed him I answered 
that I did not wish it, and that those controlling the board of 
directors would not be willing for a democrat to become presi- 
dent. The first suggestion of Littlefield's appointment I ever 
heard came from himself. Shortly before I left New York, to 
come to the October meeting, Littlefield said to me, " Swepson 
talks about resigning, and he sometimes says he wishes you to 
be president, and sometimes he says lie wishes me to take it." 
I replied that I had no idea of it, but at once thought it proba- 
ble that there was an understanding between him and Swepson, 
that he was to have the place. After we assembled at Ashe- 
ville, though Mr. Swepson, told several persons that he was in 
favor of my succeeding him, yet I was convinced that he was 
for Littlefield. Believino; Littlefield's election would be dis- 
astrous to the company, and having no suspicion that Mr. 
Swepson had misapplied the bonds, I took occasion in the 
meeting in a short speech to urge Mr. Swepson to hold on. 
Failing in this and as the only chance to keep Littlefield out, 
I urged Mr. George Gallagan to consent to run, telling him 
that he could divide his own party and be elected. He refused, 
however, and finally said that Governor Ilolden, wished him 
to consult such men as Mr. Swepson and Gen. Abbott, and 
other great men, and that he must follow out their views. I 
thereupon sought out Mr. George Dickey, another director 
and pressed him to consent to become a candidate, but without 
success. I recollect that he said it was represented to him that 



266 Document No. 11. S man 

Gen. Littlefield, being a Now Yorker would, through the influ- 
ence <>t his friends, there greatly aid us in thesale of the bonds. 
I told him it Mould be the reverse, for that Littleiield's paper 
had repeatedly been protested in New York, and that his very 
election would seriously impair our credit. When the election 
took place. Col. Davidson and I were Bitting together, and we 
both jmt tickets into the hat for Mr. Swepson, and some one 
el6e voted for him, (I suppose it was Littlefield.) The other 
nine vote.-, were cast for Littlefield. Daring that meeting I 
told Mr. Swepson, that I was not willing t<> continue on the 
board, but he said that 1 and Davidson and he ought to hold on 
for a month or two till Littlefield got under way, and then we 
might all resign together without injury. lie repeatedly ex- 
pressed great confidence in Littlefield, and said he would build 
the road. As to the Florida transaction I can state that 
about the last of November, 1S0S, at Raleigh, -Mr. Swepson 
said to me. " I wish you to go down to Florida, there 
is a chance for a great speculation there in three Railroads. I 
had some Florida mortgage bonds and last winter sent Col. 
Pnlliam and Littlefield down there, but they accomplished 
nothing, and now I wish you to go." I said it Littlefield is con- 
nected with it I do not wish to embark in it. lie answered 
that Littlefield should have nothing to do with it; that he had 
made himself unpopular there, and that he never intended to 
have any further transactions with him. lie further said lie 
would, in any event, pay me a fair compensation, including 
my expenses, and that if I succeeded in making the trade I 
should have at least one hundred thousand dollars lor my aid 
in the matter, lie explained what lie wished done. Among 
Other things, I might allow to Col. Houston and his friends 
L''» per cent, in the roads, but feared that they would want more 
and said I must get them to take as little as possible. I did, 
in fact, afterwards get them to consent to take only 10 per 
cent. After we were through at the meeting at Salisbury, 
between the 15th and 20th of December, I started to Savan- 
nah, Ca., to meet Col. Houston by appointment there. Col. 



1871-72.] Document No. 11. 267 

Houston was President of the three roads, viz : the Florida 
Central, the Pensacola 6z Georgia and the Tallahassee Railroad, 
snd about the 20th of December ot that year, I went to Savannah, 
and met there Col. E. L. Houston, then president of the roads, and 
entered as Swepson's agent into an arrangement with him. It 
was agreed that Houston, acting for Swepson, should purchase 
the major part of the stock of the Florida Central Road, the 
whole stock of that road being §555,000, and estimated both 
by Houston and Swepson as being worth a million in cash. 
He, Houston, was also to buy the greater part of the mortgage 
bonds ot the other two roads. These movements were to be 
kept entirely secret in order that the stock and bonds then low 
in the market might be bought in on the least terms. Houston 
was president of all three of the roads then, and by the ar- 
rangement he was to remain president after the roads were 
secured by Swepson, with a liberal salary. He was to have, 
he and his associates, (he thought Mr. Pappy would be with him.) 
ten per cent, interest in the roads, and certain additional advan- 
tages in mone}* and in the price of stock, which he or his rela- 
tives controlled, equal to about $100,000. Mr. Swepson, on 
my return to Xorth Carolina, was greatly pleased with the 
contract which I had made (this was substantially in writing 
or a memorandum ot it, whether executed or not, I can't say, 
but I had forwarded it by mail to Swepson,) and he assured 
me that I should make at least a hundred thousand dollars for 
my agency in this matter. A few weeks later, Swepson met 
Houston in Columbia, S. C, I think, (Swepson informed me 
of this) and perfected the arrangement, making, however, some 
changes in its terms and furnished Houston the means of buy- 
ing up stock and bonds. Swepson afterwards informed me 
that Houston was successful in buying up all the stock and 
bonds which Swepson wanted. According to his account, 
Houston expended from $110,000 to $120,000, he could not 
fix the exact amount, in the stock of the Florida Central, and 
he got for that considerably more than three-fifths of the whole. 
This road had been previously sold out under a mortgage, and 



26S Document No. 11. [Session 

re-organized and stocked at $555,000 and stood clear of debt, 
and was estimated as above mentioned as worth sIjuhhioij m 
cash. As to the bonds of the Pensacola and Georgia and the 
Tallahassee, he bought a part at 50 cents on the dollar, but 
the greater part at a much lower figure. The amount of 
bonds thus bought was $971,300. These two latter road- 
were advertised to be sold the latter part of March, 1869. 
This sale was to effect a foreclosure of these mortgage 
bonds and was to be for cash. Swepson went down provided 
witli cash funds to purchase. I held myself in readiness to 
join him there if necessary, but was telegraphed that my 
presence would not be needed. Just before the sale came off, 
the parties having control of the sale, varying from the terms 
of the advertisment, concluded to sell on credit. Thereupon 
Swepson entered into an agreement with Franklin, Dibble & 
Co., who bought the road, according to my recollection, for 
$1,420,000, which was the par value of the debt, Swepson's 
contract with these purchasers was on terms which I will 
hereafter explain: On his return to Raleigh he executed an 
obligation under seal to me on the 5th of April, 1869, to con- 
vey to me ten per cent, of his entire inteicst in all three of the 
railroads, after reimbursing himself the money actually expen- 
ded by him in his purchase. A couple of weeks later he and 
I went to the city of New York and met these Florida parties 
interested in the road, and among others Gov. Reed and the 
Attorney General of Florida, Meek, Mr. Gamble, Calvin 
B. Dibble, brother of Franklin Dibble, the purchaser. In the 
course of our negotiations at that time, it was agreed, in con- 
sideration of Geo. AY. Swepson having paid trust fees to the 
internal improvement fund of Florida, bonds of the amount 
of $071,300, being the first mortgage bonds on the Pensacola 
and Georgia Railroad, and the Tallahassee Railroad, valued 
at $007,7:55, and in consideration of the further sum of 
$462,700 paid by him at that time, or recited to be paid and 
agreed to be paid ; that in addition to the agreement between 
Swepson and Franklin Dibble and his associates entered into 



18 71-' 72.] Document No. 11. 260 

previously, to wit : on the 26th of March the said Franklin 
Dihble and his associates should execute an additional clause 
to secure the repayment with interest to the said Swepsou of 
the additional sum of $452,700, and it was further agreed that 
said Swepson should he authorized as trustee to hold said 
roads until the terms of the original agreement of March 26th, 
should be satisfied, and also this additional sum of £452,700 
should also be paid. It was then settled and agreed in sub- 
stance that Geo. W. Swepson was to be reimbursed for all the 
money actually expended in securing these contracts, inclu- 
ding his commissions, attorney's fees, and all other expenses, 
and also to receive a profit of $150,000 in cash, and 
that the two roads were to be mortgaged for the purpose of 
paying him these several sums of money. It was understood 
that Swepson was not to be paid the par value of the bonds 
delivered, but merely the moneys actually paid out by him 
with interest, with the addition of the $150,000 profit. It was 
further agreed that he should own $1,000,000 or $1,200,000 of 
the stock, I am not quite sure which, of the whole amount of 
the stock, which was understood to be $9,000,000 of these 
two roads. This was the stock contemplated to be issued on 
a reorganization of these two roads. The substance of these 
agreements were all put in writing, and are now doubtless in 
the hands ef some of the parties. On the 26th of April, 1869, 
during those proceedings, Geo. W. Swepson entered into an 
agreement with Calvin B. Dibble, of New York, that after 
reserving ten per cent, of his interest in the Pensacola and 
Georgia road, the Tallahassee and Florida Central, which ten 
per cent, had been previously conveyed to T. L. Clingman, 
and also not more than five per cent, to be reserved to M. S. 
Littlefield, lie M'ould convey one-third of his remaining interest 
to said Calvin B. Dibble, reserving two-thirds for himself and 
his brother Robert. He also agreed to convey to said Calvin 
B. Dibble 1,120 shares of stock in the Florida Central in lieu 
of one-third of the $150,000 profit, which he, Swepson, was to 
receive. The said Swepson always alleged that this $150,000 



1 jT (I Dooumbht No. 11. [Session 

ot profit was to reimburse him for his purchases of the Florida 
Central stock as above stated. Swepson was to perform this 
last mentioned agreement as soon as the bonds provided tor in 
an article between himself and F. Dibble and his associates, 
bearing date March 26th, 1869, should be issued. 

This agreement of March 20th, was in substance as follows: 
that Geo. W. Swepson was to be repaid with interest all 
moneys expended by him in securing interests in the Fensacola 
& Georgia and Tallahassee roads, including all commissions 
and attorneys fees and a profit of $150,000 ami that a mortgage 
should be placed on the roads to raise this sum as soon as pos- 
sible, and in addition to this, it was understood that Swepson 
should have stock in the roads in the ratio of $1,000,000 or 
$1,200,000 to $3,000,000. This was in consideration of his 
paying in the bonds as above mentioned to the Internal 
Improvement Department. (Whether this agreement was 
executed before the sale I cannot say, I think the under- 
standing was had before the sale.) By the April agree- 
ment made in New York, as already mentioned, the sum 
ot $452,700 paid by Swepson was to be placed on a similar 
footing with his previous advances and to be reimbursed out of 
the mortgage bonds. In the latter part of July or August, 
1868, several meetings were held by these parties at the St. 
Nicholas Hotel, at which I was present, and at which M. S. 
Littlefield and Sanderson were also present, and the above 
mentioned contracts were somewhat modified. Swepson agreed 
to accept two acts which the Florida Legislature had passed 
under the management of Littlefield. The Florida parties 
were very much in want of present money, and Swepson agreed 
to give, and paid them there $25,000, and in consideration of 
that they increased his stock in the two roads to $1,800,000 or 
three-fifths ot the whole, the said Swepson being very anxious 
to have the control of the two roads. This closed my particu- 
lar connection with these transactions. Some time in Decem- 
ber, (it was on the 20th.) 1809, at my room in Washington, D. 
C, Littlefield told me that he had bought out Swepeon's 



1871-72.] Document No. 11. 271 

entire interest in Florida roads with the understanding that he 
was to pay me my entire interests in the Florida roads. He 
said that the three roads were worth $3,000,000 in cash and 
thatSwepson's interest being three-fifths, was worth $1, 800,000, 
and that he did not think that Swepson had actually expended 
in cash more than $600,000, leaving his profit $'200,000. He 
then wrote a letter to Swepson saying that they had better- 
settle up with me, at once for my interest. This letter he 
sealed and gave to me, but requested me not to mention to 
Swepson that I had seen its contents. He said further that he 
had then no money in hand but he thought that Swepson 
could arrange it to pay me for my interest. I delivered the 
letter to Swepson at Barnum's Hotel, and after reading it, he 
invited me to his room. I stated to him that Littlefield esti- 
mated his interest at $1,800,000. He said that it would be 
worth that much if lie were to hold on to it and work it out, 
but that he meant to sell it out and advised me to sell out my 
interest. We thereupon made an agreement for the sale of 
my interest to Littlefield, which was sanctioned by Littlefield 
who srave me his obligations therefor. It is proper that I 
should say, that I did not, in accordance with Littlefield's re- 
quest, inform Swepson that I knew that he had several months 
previously sold out his interests to Littlefield. Gen. Little- 
field in those conversations then held with me stated that he 
was about to start to Florida to raise money out of Swepsotrs 
interests in the roads for the benefit of the "Western Division 
■of the W. N. C. It. R. Co., to enable him to prosecute the 
work on the same vigorously. He thought that in 20 days he 
would return with a large amount of money realized there for 
our road and that he would also without inconvenience be able 
to pay me for my interests. By the terms of the contract 
agreed on, Littlefield was to pay me ten thousand dollars down 
.and fifteen thousand in six months. It was further understood 
that I was to retain my interest in the Florida property and 
my claim on Mr. Swepson for it until Littlefield paid me the 
price agreed on. Next morning Mr. Swepson gave me a 



272 Docoment No. 11. [Session 

note of Littleficld fur tlie fifteen thousand dollars and 
stated that Littleficld would pay the ten thousand dollars 
in ten days probably, and certainly in twenty day.-. 
At all times Mr. Swepson spoke of the Florida purchase as i 
private transaction of his own, and never once intimated in 
my bearing that it was an investment for the N. C. Railroad. 
His conveying me ten per cent, of his interest and his subse- 
quently conveying one-third of the remainder to Calvin B. 
Dibble, and reserving one-third fur himself and his brother 
Robert, showed clearly that he did not regard the Florida in- 
terest as belonging to the Western Division of the W. X. 
C. Railroad. As to the $15,00#, stated by Mr. Swepson, as 
paid to me, though I have no means now of ascertaining ex 
actly huw much I received from him at different times, I would 
think it would amount to that much and possibly a little more, 
but I cannot speak with certainty. It was intended as a com- 
pensation for my professional services, partly at Raleigh, while 
I was attending to the business of Mr. Swepson, as above 
stated, and also for my aid in the Florida transaction. When 
lie gave me the obligation for the ten per cent, of his in- 
terest in Florida, it was agreed between us that I should 
go with him to New York to continue the prosecution of 
that business, and I was there two or three times and for 
weeks at a time working in that matter. All I ever re- 
ceived from Mr. Swepson, was not, I think, sufficient to pay 
ray actual expenses while attending to the matters in which 
he was interested. From the Railroad Company, I received 
my mileage as a director for attending some of the meetings, 
in all amounting to something more than a hundred dollars. I 
was requested by a resolution of the company to go to "Wash- 
ington to assist in getting an appropriation for the Southern 
Pacific Railroad, and I remained there nearly two months in the 
winter of 186$ on that business, but I never made any charge, 
nor did I ever receive anything from the company on that ac- 
count. At a second session a similar resolution was passed, 
and! spent -several weeks at Washington, but have neither 



1871-72.] Document No. 11. 273 

asked nor received anything therefor. Unless I should collect 
the contingent interest, I have for the Florida business, besides 
a loss of nearly two years time, I have expended some thous- 
ands of dollars, more than all I received from Mr. Swepson. 
As to the money Mr. Swepson paid me, on the two drafts of 
Littlefield, that money was not paid for anything done for Mr. 
Swepson or for his road. I had done some important business 
for certain parties, not for the purpose of securing appropria- 
tions to any roads in North Carolina, and had been informed 
that they had placed money in Gen. Littleiield's hands to pay 
me. Gen. Littlefield admitted that he had received the money, 
but said he had used it. He spoke of being able to get the 
money from Mr. Swepson, and drew on him, and I accepted as 
I should have done on any other solvent person or bank. I do 
not remember ever acting as Mr. Swepson's counsel, in any 
business after he went out of office. In December of 1869, 
Gen. Littlefield came to my room in Washington, and spoke as 
if he was just from Mr. Swepson, saying that he had advised 
that I should become Mr. Swepson's counsel, in all his difficul- 
ties, and assist him out of all his troubles, and be very liberally 
paid therefor. I understood him to make the proposition from 
Mr. Swepson, and replied that as I was a director on the road 
I could not appear for Mr. Swepson, in any matters between 
him and the road. Gen. Littlefield then reminded me that I 
had been proposing to resign my place as director, and 
might at once do so and avoid the difficulty. I answered 
that until there was a settlement with Mr, Swepson, I 
did not wish to resign, and that even k if I did, 1 could not appear 
for Mr. Swepson in a contest growing out of his operations for 
the road while I had been one of the directors. I ought to 
state that Mr. Swepson called at my room on the morning 
before the meeting of the directors in October, 1869, and asked 
me to assist him in preparing his report. I stated in it all lie 
desired, lie did not then or at any time previous tell me any 
thing about the amount of the sales of his bonds, except that 
as we came up the road the day previous he said he had sold 

18 



274- Document No. 11. [Session 

a few of them to get them on the stock board. His announce- 
ment in the meeting on that day that he had sold $225,000 as 
above stated, was the first information I had on the subject. 
From the confident manner in which he made the statement, 
and asked that a committee be raised to settle with him, I took 
for granted he had all the remaining bonds. I also had no 
doubt but that he was then readj to settle up, and made the 
motion with a view of having the committee immediately 
appointed and the accounts examined that day. Abbott's delay 
surprised me, and hence I twice called on him to appoint the 
committee, and still expected the settlement to be made, till I 
was informed that Swepson and the others had gone oft". I 
never heard Mr. Swepson say what mouey he used in the 
Florida purchase. He never intimated that he had used the 
funds of the road, nor did he tell me how much he had used. 
From all the information I have received I do not think in the 
purchase he used more than four or five hundred thousand 
dollars, but it has been reported to me that he expended addi- 
tional sums since. None of the money passed through my 
hands, nor do I know who made the payments except that 
Swepson said, as above stated, that he furnished Houston funds 
to buy up the stock and bonds. In the summer of 1870, or at 
least sometime during that year, I was at the National Hotel, 
in Washington City, accidentally, in the presence of John T. 
Deweese, who had been previously expelled or forced to resign, 
and he was conversing with two or three persons about him, 
whom I do not remember, though I think Pryun was one of 
thorn, and he, Deweese, said there had been a ring or combination 
at Raleigh to influence legislation for railroads. I do not rcmem 
ber whether he said it was at the July session of 1868 or at the 
November session. He said that he was not himself a member 
of the ring, I ut that lie knew of all their operations and made 
them give him $20,000 to keep him from exposing them. He 
said Anbott, Estes and French were all in the ring. I do not 
think he mentioned any other name. He seemed to be speak- 
ing about it with an air of great levity and carelessness. I 



1871-'72.] Document No. 11. 275 

offer the agreement with Mr. Swepson for inspection and ap- 
pend a copy of it to my evidence. 

T. L. CLINGMAN. 
Subscribed and sworn to before the commission this 30th day 
of August, 1S71. 

The deposition of Marcellus J. Fagg : 
Q. State whether or not, in your opinion, the prices agreed 
upon in the contracts made June, 1869, were fair and reason- 
able and made in good faith, in all respects, and whether you 
had means for knowing what the prices were? 

A. I did have means of knowing what the prices were, and 
think that they were fair and reasonable, if the contracts had 
been complied with in good faith by the company. I think that 
the contractors fully complied with their contracts ; moreover, 
I think that the contractors have been seriously damaged by 
the way the matter was transacted. 

Q. Do you know any thing about payments made to con- 
tractors and others in New York? 

A. I took ten bonds of Wilmington, Charlotte <fc Ruther- 
ford Railroad at 70 cents, while they were really only worth 
60 cents. I know also that G. M. Roberts and Col. Pulliam 
took bonds at the same time and on the same terms. 

Q. State if you know of any steps that were taken to pre- 
vent the return of the bonds into the hands of the Treasurer 
of the State ? 

A. When I was in Washington, in February, 1870, Colonel 
Davidson approached me and said that Mr. Swepson wanted 
me to go to Raleigh and file an injunction on Littlefield and 
Swepson to prevent the bonds and funds from going into the 
hands of the Treasurer of the State. Afterwards Mr. Swep- 
son sent for me, and he insisted on my doing so. I refused to 
go, telling Mr. Swepson that I had no money to travel with. 
Mr. Swepson proposed to furnish the money to defray the 
expenses of Messrs. Davidson and Roberts and of myself. I 
agreed to go to Raleigh only on the condition that I went 



270 Documhnt No. 11. [Session 

entirely untrammelled, and would decide what was best to be 
done after arriving there. On the morning of leaving Wash- 
ington, Gen. Littletield came to the boat and urged that I 
should procure the injunction, and promised that he would 
pay the money as soon as I returned, whether J hied the 
injunction or not, but told me that I must say nothing about it 
go as to implicate himself, the President, as it would show col- 
lusion on his part. On reaching Raleigh I consulted my friends 
and was ot the same opinion that I was before leaving Wash- 
ington, viz: that by filing the injunction 1 would afford no 
advantage either to the Road or to the State, or myself. 
I returned immediately to Washington, and then the) r refus- 
ed to pay me the money, but Gen. Littlefield said that 
his financial agent, Col. Littlefield, would do so if I went to 
New York. 1 went to New York, but still they refused to pay 
me the money, which was the only thing I would take. Rob- 
erts and Col. Pulliam, had agreed in Washington to take 
bonds, and I had refused and the money had been promised 
me. I was afterwards compelled to take the bonds as the last 
resort. Souter & Company, who held the bonds refused to pay 
the bonds, and denied that any such bonds were there After 
much trouble we finally obtained them by procuring the assist- 
ance of a lawyer in New York. 

Q. Do you know or have you heard of any other matter, in 
any way connected with the object of this investigation ? 

A. 1 know nothing myself, but was told by Maj. Rollins, 
that Swepson, while president, said that he would keep tin- 
contractors poor, and he (Swepson) would furnish him S'200,- 
000, and he could buy up the contractors' claims, and that 
they then would divide the profits. Maj. Turner told me 
several times that Swepson told him that he intended to break 
up all the eon tractors. 

M. J. FAG0. 

Subscribed and sworn before me a eommissioner, this 30th 
day of August, 1871, 

J. G. MARTIN. 



1871-'72.] Document No. 11. ' 277 

The deposition of James II. Merrimon : 

Q. State all } t ou know of the organization of the Western 
Division of the Western North Carolina Railroad, and all yon 
know as to the subscriptions for stock of said company, and the 
letting of the contracts for the building of said road, or any 
part thereof. 

A. I understood that the organization was under a statute passed 
by the last Legislature making two divisions of the Western 
North Carolina Railroad. The organization was at Morgan ton, 
N. C, I think, in September, 1868. I was not present, but 
was advised that I had been chosen a director on the part of 
the private stockholders. I know nothing ot any subscriptions 
of stock, and never subscribed any myself, nor paid anything. 
In December, 1868, I attended a meeting of the directors at 
Salisbury, N. C. There was very little done at that meeting 
besides the passage of a resolution authorizing G. W. Swepson, 
the then President of the Western Division of the road, 
to make investments of the bonds issued by the State to the 
said road. I attended another meeting of the directors in June 
or July, 1869, at which I understood the contracts for the con- 
struction of the road were to be let. There appeared to be a 
great number of bids, and it was suggested by some one that 
the meeting adjourn so as to give the chief engineer an oppor- 
tunity to classify the bids. This suggestion was adopted, and 
I afterwards understood that the chief engineer took control of 
the matter, and awarded the contracts without the presence or 
the approval of the Board of Directors. It appeared to me, 
from what I saw at the meetings of the Board of Directors 
which I attended, that they were a useless body of men ; did 
nothing, and if they had any power or authority to do anything, 
they seemed never to exercise it, except as they were told by 
Swepson. 

Q. Do you know, or have you heard anything ot an alleged 
contract between Swepson and Turner, for the company, and 
Littlefield & Co., or Drane and McDowell, or other parties ? 
If so, state all you know or have heard ? 



$7S Document No. 11. [Session 

A. I know nothing of my own knowledge ot any such con- 
tract, but have heard, from whom I do not now recollect, that for 
the purpose of formally complying with the requirements of the 
statute, the entire road was let to some parties, of whom Gen. 
Robert Henry was one ; that sole object of this letting was to 
enable the president of the road to make a certain certificate, 
which the law required, to enable him to get hold of the bonds 
of the State, appropriated for the building of the road : that 
the said contract was not bona fide. I never heard of its being 
submitted to the board of directors, and never heard it spoken 
of in any meeting of the board. At the time of this alleged 
letting, the road had not been surveyed, and no estimates made 
by the chief engineer of the said company, but the survey and 
estimates were made afterwards. After attending the first 
meeting, which was at Salisbury, I formed the opinion, and 
expressed it to many, that there was a deliberate purpose on 
the part of some persons to swindle and defraud the State by 
"using the means at their disposal for private purposes, and I 
never had any occasion 6ince to change my opinion. At the 
end of the first year I was not re-elected a member of the 
board of directors, and I have alwavs believed the reason that 
I was left out was on account of having frequently declared my 
opinion, as above stated. I was the only one of the old board 
left out. In the summer of 1870, I had a conversation with 
Capt. Thos. Allen, who was connected with the corps of the 
engineers of the said road. He stated to me, substantially, I 
think, that a contract had been entered into by which the road, 
either from Asheville to its western terminus, or from Ashe- 
ville to Paint Rock, was let to Drane and McDowell and cer- 
tain other parties. The terms ot the contract with these 
parties were that 50 per cent, was to be added to the engineer's 
estimates, and $1,000 per mile for contingencies, added to this. 
Capt. Allen stated that ho had seen the contract, and showed 
me what purported to be a rough draft of it. I have heard 
it said, I cannot say now by whom, that a large sum of money 
Lad to be paid Drane and McDowell before they would 6ur- 



1871-72.] Document No. 11. 279 

render the contract made with them. Capt. Allen at that time 
expressed his readiness to be examined about this matter when- 
ever he should be called upon. This he did in reply to a state- 
ment I made to him, that I had no doubt the General As- 
sembly, as soon as it met in November, would pass an act to 
organize a committee to investigate the management of the 
road. 

Q. Do you know or have you heard of any other matter in 
any way connected with the object of this investigation. 

A. Nothing else occurs to me at this time. What I have 
stated in answer to the questions asked me, is my best impres- 
sion. 

JAMES H. MERRIMON. 

Subscribed and sworn before me, a Commissioner, the 31et 
day of August, A. D. 1871. 

J. G. MARTIN. 



Questions propounded to N. W. Woodfin, Esq. 

Asheville, Sept. 2d, 1871. 

1. State all you know of the organization of the Western 
Division of the Western North Carolina Railroad Company, 
and all you know as to subscription for stock in said company, 
by whom taken, and how and when paid, and also as to the 
letting of contracts for the building of the road, or any part 
thereof? 

2. Did you ever have any conversation or conversations 
with G. W. Swepson in relation to the sale of North Carolina 
State Bonds issued for the benefit of the Western Division of 
the Western North Carolina Railroad ? If so state when and 
where such conversations were held and the substance of them. 

3. Do you know or have you heard of any State bonds or 
money or any thing of value being used by any one to in- 



i^'» Documknt No. 11. [Session 

flnence the Legislature or Convention, or any officer of the 
State government, or any officer of a railroad in which the 
State has an interest, in their official conduct ! 

4. Do you know of any State Bonds belonging to any rail- 
road having been used by any person to his own advantage \ 

5. State all you know about the purchase of Florida rail- 
road stocks or bonds by G. W. Swepson, the time when, the 
price paid, and out ot what funds the money was paid, and 
whether the purchase was made for Swepson individually or 
for the benefit of the Western Division of the Western North 
Carolina Railroad? 

6. State whether any of the bonds issued by the State for 
the benefit of the Western Division of the Western North 
Carolina Railroad were ever borrowed by you or any other 
person from Mr. Swepson, or in any way used or disposed of 
for the benefit of individuals? 

7. State the general reputation as to solvency of M. S. Lit- 
tlefield and R. M. ITenry at the time they made subscriptions 
to the stock of said Road ? 

8. Was there any resolution passed by the Board of Direc- 
tors of said road, directing how, when, where, by whom and 
at what price the bonds should be sold ? If so, give the date 
and substance of such resolution or resolutions. 

9. State all you know as to the sale of these State bonds 
by G. W. Swepson and others. 

10. State any other matters that you know in any way 
connected with the objects of this investigation ? 

11. State all you know of matters connected with the Eastern 
Division of the Western North Carolina Railroad, cominjr 
within the objects of this investigation ? 

12. Name such witnesses as can give information on the 
last question ? 

Testimony of W. N. Woodfin, to interrogatories herewith 
attached. 

To interrogatory 1st he answers as follows : 

About the summer of 1868, I received a commission, but do 



1871-'72.] Document No. 11. 2S1 

not remember from whom — am in doubt whether it was issued 
by the Governor or the President of the Western North Caro- 
lina Railroad Company — authorizing me to receive subscrip- 
tions to the stock of the Western North Carolina Railroad 
Company. I do not remember whether any one else was as- 
sociated with me in said commission or not. The books were 
opened at Asheville, subscriptions to a large amount made, 1 
believe entirely by parties desiring contracts on the said Rail- 
road. Many of the largest subscriptions, were made by parties 
already working on contracts on the road, between Morgan- 
ton and the Blue Ridge. Others by parties not working, but 
desiring contracts on this road, living between Morganton and 
Cherokee, subscribed largely, and all, as far as I remember, 
with the understanding that they were to be contractors, and 
that their stock was to be worked out in accordance with the 
provisions of the charter : that these subscriptions in round 
numbers, amounted to about a million of dollars. In pursu- 
ance of a call by the president of the road, or the Governor, I 
do not remember which, on the 15th, October, 1868, I met at 
Morganton, with a number of others said to be commissioned 
for a like purpose, and had an informal conversation with 
some of them, and many others, at the hotel, the Mouutain 
House, the evening before the meeting. In this conver- 
sation the amounts subscribed, in various sections of the 
State, were freely spoken of. Messrs. George W. Swepson, 
Gen. M. S. Littlefield, Col. C. Littlefield, William Askew, from 
Raleigh, Deweese, member of Congress from Wake, I believe 
Gen. Abbott, Maj. Turner, and many others acting prominent 
parts in the organization afterwards were present. The posi 
tion assumed by Swepson, Littlefield and those acting with 
them, was that no small contracts should be let out, and no pre- 
ference should be given to subscribers of stock in letting the 
contracts, but that large and experienced contractors should 
be prefered, and that the'payments should all be made in cash. 
I met and combatted this position, upon the ground that the 
charter especially authorized that the subscribing stock might 



282 Document No. 11. [Session 

be paid in work, and that all or nearly all the subscriptions 
had been made with that distinct understanding, and that in 
no other way could the individual stock, amounting to over 
three millions, ever be raised and paid. On the morning ot 
the 15th, the following day, at the meeting of the commis- 
sioners and others for the purpose of ascertaining the stock 
subscribed and of organizing a company, alter an informal or- 
ganization of the meeting, a committee was appointed to 
verify proxies and report the amount of stock subscribed. 
And thereupon, Gen. E. M Henry offered a resolution in 
writing, directing the committee to regard as void all stock on 
which five per cent, had not been paid, or on which five 
per cent, should not now be paid. I opposed this resolu- 
tion, as being unreasonable and unlawful, and called to 
know if five per cent, had been paid upon any one share sub- 
scribed upon any of the books. It was admitted that there 
had not been any such payment. I insisted that it was im- 
possible to prepay in labor, and that all subscriptions known to 
me were made expressly to be paid in labor ; the contrary posi- 
tion was advocated by Gen. Henry and Judge Merrimon at great 
length. After a full debate, the resolutions were adopted. 
And thereupon the committee appointed, to wit : George "W. 
Swepson, Gen. R. M. Henry, Dr. Samuel L. Love, with others, 
retired to a room, and 60on after returned and reported that 
three thousand and eighty shares ot stock had been subscribed, 
and five per cent, then and there paid thereon, amounting to 
fitteen thousand four hundred dollars. While in the room a 
message came from Mr. Swepson to me, proposing to accept 
my check on the bank of Raleigh for the five per cent, of any 
subscription I might choose to make. I answered them that I 
had no deposit in bank on which to check, and that they had 
no authority to receive subscriptions, as tho time limited tor 
keeping the books open had expired, and that I should resist 
any organization made under a bogus or unlawful subscrip- 
tion. I had previously begged for thirty days time tor the 
absent subscribers on my book, to pay if they chose, which 



1871-72.] Document No. 11. 283 

bad been refused. They, however, proceeded to organize, 
electing directors and other officers of the company, with 
those appointed by the governor, making as directors George 
W. Swepson, George W. Gahagan, A. T. Davidson, T. L. 
CHngman, W. W. Rollins, George Dickey, James Mer- 

rimon, Joseph C. Abbott, Amnions, G. M. Roberts. 

The board elected G. W. Swepson, President, and G. M. 
Roberts, Secretary and Treasurer. The books, or sheets of 
paper upon which the subscriptions were written, were left 
with the company. It had been understood the evening be- 
fore that about two million dollars worth of stock had been 
subscribed. As far as I know not one share of the stock sub- 
scribed upon the books, whish I reported, was retained. 
Though I regarded some of the subscriptions reported by me 
as large for the parties making them, yet I believe they were 
all made in good faith, and with the bcrna fide intention of 
working them out. I publicly announced my purpose to 
resist this organization and test its validity in the courts, but 
was soon thereatter informed that the board had resolved upon 
building the road west as far as Waynesville within two years, 
and was importuned by some of my own friends not to 
resist making a road to my own home. I determined, 
therefore, to offer no opposition, but to give it all the 
encouragement I could, and in a short time "was retained as 
counsel lor the corporation. In the summer of 1869, 1 learned 
from Mr. B. J. Smith, of Asheville, that the contractors then 
at work on the road, were not required to take any stock, but 
were promised to be paid entirely in cash tor their work. I 
saw such of the directors as were here, the Chief Engineer, and 
urged that this course should not be persisted in, as no pay- 
ments had been made on the private stock whatever, and I felt 
sure it would not be paid in cash. Mr. Swepson was after- 
wards in Asheville, and requested an interview with Gen. 
Clingman, A. T. Davidson and myself, upon this particular 
subject. Mr. Swepson seemed to concur, as did Gen. Cling- 
man and Col. Davidson, that the stock would have to be 



284 Document No. 11. [Session 

worked out or it would not be paid, this was about the time 
Swepson went ont of office in October, 1869. It was admitted 
that no payments on the private stock had been made, after 
the five per cent, was made, or called for, on the first subscrip- 
tions, nor had any been required or called f<>r. In a day or 
two thereafter Gen. M. S. Littlefield waa elected president 
against the written remonstrance of nearly all the citizens of 
this place, as it was nndei stood that he was not only a stranger, 
but generally understood that he was insolvent, and unreliable 
in every respect. He undertook by argument to convince me 
that it was not necessary to call for the payment of the indi- 
vidual stock, that he could carry the stock by a certain mode 
of financiering, and build the road, and that the company would 
then own the stock, and it would constitute a basis of credit, 
so that bv mortgaging it and the road, the bonds could be sold 
at par, and cited several cases in which he said that policy had 
been successful; when I remarked to him that it was in viola- 
tion ot our charter and a fraud upon the State, and might be 
made a ground of forfeiting our charter. He said, if it came to 
that, he could easily raise the money and pay the whole amount 
in cash. I understand that no payment has since been made upon 
the individual stock. I was never a director in the road, and only 
became a stockholder to the extent ot the stock I owned in the 
Buncombe Turnpike Road, part of which had been trans- 
ferred to this Railroad Company by authority of an act of the 
Legislature, each becoming entitled to stock of equal value in 
this corporation. This stock was reckoned to be in the ag- 
gregate about forty-nine thousand dollars as distributed among 
tin' different stockholders in the Buncombe Turnpike Com- 
pany proportioned to their respective interests. This arrange- 
ment had been agreed to by the two companies before the 
division of the Western North Carolina Railroad Company 
into two sections, and was afterwards ratified and approved 
by the Western division, (leu. Littlefield was never in this 
country after his election to the Presidency. Before leaving, 
however, he retained me as one ot the counsel of the corpora- 



1871-72. Document No. 11. 285 

tion. Pome months thereafter I learned irom Cols. R. "VV. 
Pulliam and A. T. Davidson that they had each seen in the 
possession of Mr. Swepson, signed by Gen. Littlefield, as 
President of the road, a receipt acknowledging full payment 
and satisfaction lor all moneys received by said Swepson as 
President, giving him a full discharge of all liabilities to the 
company. About January or February, 1870, I met Mr. 
Swepson in Baltimore, when he told me that he had made a 
full and final settlement with Gen. Littlefield, and had from 
him a full receipt. He called Gen. M. "VV. Ransom, who was 
near by, to confirm his statement, and say that he had seen the 
receipt. I asked Mr. Swepson in what were the payments 
made, and what amount, and especially it the funds or securi- 
ties were in such a shape that the work would proceed at once. 
He answered, that the funds were sufficient to finish our road 
to Waynesville, and were well secured and available. I 
asked him if they were in Federal securities ? He said no, 
but that they were well secured, and had been done by the 
authority of a resolution of the Board of Directors. In March 
following I met Gen. Littlefield in Raleigh, and appealed to 
him to push the work forward, and to know in what shape his 
funds were, and why it was there was so much delay. He said 
he could not command funds ; that Mr. Swepson had paid 
him nothing and he could not bring him to a settlement. 
I informed him what Mr. Swepson and others had told me 
about the settlement and the receipt. He said he did give 
him such a receipt without having a settlement or payment, 
and that he held a paper from Swepson that would kill that 
receipt ; said the receipt had only been given to carry Swepson 
and he knew it, and that Swepson had acted very badly to 
show it, and throw the blame on him. Mr. Swepson afterwards 
came to Raleigh, a day or two alter Gen. Littlefield. Each 
said he had come to make his report, as required of them by 
the late act of the Assembly. Mr. Swepson sought an inter- 
view with me at the hotel about this time. He said the time 
had nearly run out for making his report. He desired to make 



286 Document No. 11. [Session 

a compromise of the whole matter with the company, and 
spoke to me, as counsel for the company, to see it it could not 
be brought about. He said that he and Gen. Littletield had a 
very wealthy and experienced railroad contractor there, who 
was willing to undertake the completion of the road from l'aint 
Rock, on the Tennessee line, on French Broad River, to Ashe- 
yille, thence to Waynesville ; make a first class road, stock it 
well, for the assets in his and General Littlefield's hands. The 
contractor would guarantee to do the work in the specified 
time, and look to him and Littletield for the money ; that he 
(Swepson ) would give a mortgage upon his entire real estate 
to guarantee its performance. lie desired this, and be relieved 
from being examined, so as not to expose some of the promi- 
nent men in the State, which he would have to do it he was 
examined. 1 told him that I would see as many of the lriends 
of the road as i could that day, and confer with them, see if 
they thought the proposition should be entertained by the 
company, and see if it was advisable to try to get a meeting of 
the directors to consider it. I saw him at night in his own 
room, soon after supper ; told him that I had conferred with a 
great many members of the Legislature and others, and I 
wished to go over to the other hotel to see two or three 
other parties, and would see him again in a short time, 
and 1 believe in about an hoar was the time agreed 
upon. 1 went and returned according to agreement. 
It may have been nine or half past, when I returned. I 
found that he was not in his room. Mr. R. Y. McAden and 
Rosenthall, his clerk, were sitting in the room, having, what 
appeared to be, tor one or more men, a supper upon the table 
in the room. Mr. McAden asked me to wak, as Mr. Swepson 
had just stepped out, and would be back directly ; that his 
supper had been brought to him and was waiting for him. 1 
waited a considerable time, near an hour. He did not return. 
Next day, about eleven o'clock, being in the meeting of the 
stockholders of the road, in Gen. Littlefield's room at the 
other hotel, James Harris, (colored,) called Gen. Littletield 



1871-72.] Document No. 11. 287 

out, who soon thereafter returned and informed us that S wes- 
son had run away early the night before. About noon I re- 
turned to my hotel, the Yarborough House, and a short time 
thereafter Mr. Blair, the keeper of the House, gave me a note 
from Swepson, saying that Mr. McAden had requested him to 
hand it to me. The note stated that his wife was sick, and 
that he was going to Haw River ; that Mr. McAden was au- 
thorized to represent him in the settlement and give a mort- 
gage on his lands, and that he would be back to-morrow. I 
saw Mr. McAden and asked him if he had any such authority 
to give a mortgage on Swepson's lands. He said he had not. 
He said that he had remonstrated with Mr. Swepson against 
going away ; that he had started the night before, soon after I 
had left the room ; that Smith, the President of the North 
Carolina Railroad Company, and others had frightened him 
and urged him off, assuring him that I had already placed 
a process in the hands of the sheriff to arrest him for a large 
sum. General Littlefield told us that Swepson had all 
day been urging him to run' away, Littlefield to go to Florida, 
and he to Canada. I never saw Mr. Swepson again until 
the latter part of March, when I went on as one of the Com- 
missioners to settle with him and Littlefield. I have no 
personal knowledge as to the letting of the contracts. In 
In answer to the second interrogatory, I need only say, that 
for three weeks I, together with W. G. Candler, W. P. Welch 
and W. W. Rollins, were engaged with Messrs. Swepson and 
Littlefield alternately in "Washington city and New York, as 
commissioners, appointed by the Legislature and the railroad 
company, endeavoring to effect a settlement touching Swep- 
son's liability for sale of the bonds, &c, and his management 
of the affairs of the road. During this time, I had a great deal 
of conversation with both of them, about the sales of the 
bonds and the investments in Florida. Gen. Littlefield left 
Raleigh a few days before the bill was passed appointing the 
commissioners. It was pretty well understood that the bill 
would pass. I enquired very fully of him before he left 



_' vv Doer mint No. 11. [Session 

Raleigh, of his knowledge of the sale of the bonds, and of the 
disposition of the money. He said that lie knew that Mr. 
Swepson had sold all or must of the bonds, and had sold the 
greater part of them well ; that he was satisfied that Swepson 
was a very rich man now, unless he had been badly broken be- 
fore he went into the office ; that he was with him all the 
time during the gold panic in .New York, and when Swepson 
bad professed to have sustained heavy losses, that he is .satis- 
fied he did not sustain any loss, but made a considerable amount 
in buying and selling gold. Mr. Swepson filed with us a state- 
ment of the number of bonds received by him and what pur- 
ported to be an account of sales made by (Soutter & Co., of N. 
Y., brokers, tor him, showing the sale of about three thousand 
bonds, netting about one million five hundred and two thousand 
dollars ; also a statement from L. P. ]>ayne & Co., showing 
some sales, all of which is fully set out in the report made to 
the (.iovcrnor by me on behalf ot the commissioners in last 
January. I beg to refer to that report and the exhibits as 
part ot my testimony. I think it is true in every respect. I 
do not remember any conversations with Swepson that would 
throw any light on this subject beyond what appears in the 
papers and in my report. 

3. In answer to the third interrogatory, I would sav that 
I do not know of* any such thing being done, as asked in this 
interrogatory, but have heard much on the subject. Apart 
from the mere rumors, which could not amount to testimony, 
I have heard from Mr. Swepson, especially, and from General 
Litthlit Id, to some extent, statements of such acts. Mr. Swep- 
son stated to the commission more than once, while on the 
settlement, and in my hearing since, that it was generally un- 
derstood and agreed, before the bill authorizing the issue of 
any of these bonds was passed, that ten per cent, in kind of 
all the bonds procured to be issued, should be paid to certain 
paties procuring thettawe to be passed, but would not say to 
whom the payments were to be made. He said that all the 
railroad president! in theJState, except, two, concurred in this 



1671-'72.] Document No. 11. 289 

arrangement. He presented a claim for about two hundred 
and forty-one thousand dollars, which he [alleged he had 
paid out in cash, to procure the passage of the bills. This, 
however, is also stated in my report referred to before. I do 
not remember that he professed to know how far this general 
arrangement of the payment of this ten ' per cent, had been 
carried out. I fmd from the account filed by Henry Clews & 
Co., of New York, in their suit against G. W. Swepson, that 
Swepspn was charged with fifty thousand dollars, or over, for 
loss or balance due on account of bonds sold by them for Gen. 
Laffln, and which it was alleged Swepson had guaranteed. 
These bonds, Swepson tells me, belong to the Western Divis- 
ion of the "Western North Carolina Railroad Company. I 
suppose they constituted a part of the bonds given under this 
general ton per cent, arrangement. Many of these statements 
by Swepson were made in the presence of Gen. Littlefield, 
who appeared to be cognizant of all these facts and acquisced 
in what Swepson said. 

4. In answer to the forth interrogatory, I would say that I 
do not know of any State bonds having been used by any 
person for their own advantage, except those sold and convert- 
ed by Mr. Swepson, as set out in the report heretofore referred 
to, and those which went into Littlefield's hands through 
Soutter ife Co., the account of which I have as yet been un- 
able to procure from either of them, and the Rutherford, Wil- 
mington and Charlotte Railroad mortgage bonds, which went 
into the hands of Gen. Littlefield, over one hundred thousand 
dollars of which he has rendered no account for, which are 
supposed to be in his hands or in the hands of his agent C. Lit- 
tlefield. The ninty bonds lent to Hooker, Harris & Co., referred 
to in my report, appear to have been settled with Calvin Little- 
field, or the General, at 23£ cents on the dollar, towards which 
three thousand dollars was paid in cash, balance seecured by the 
notes of Hooker, Harris & Co., without security, on time. 
These notes we are now informed were hypothecated upon 
and money raised npon by Littlefield, but to what extent we 

19 



290 Document No. 11. [Session 

cannot ascertian. Hooker, Harris & Co., failed before the 
first note fell due. The fifty bonds lent in Baltimore, to Fells 
& Co., it is said, -were settled at twenty thousands dollars in 
cash, with Gen. Littlefield, or his agent for him 4 

5. In answer to the fifth interrogatory, I would say that I 
have no personal knowledge. Both Mr. Swepson and Gen. 
Littlefield intormed us while on our settlement, that Mr. Swep- 
son had paid seven hundred and twenty-six thousand dollars of 
the money realized from the sale of railroad bonds in Florida 
in purchase of stock in the Florida Central Railroad and 
mortgage bonds of the railroad leading from Lake Citv to 
Qnincy, by way of Tallehassee, and connecting with a cross 
road down to St. Mark's, now constituting the Jacksonville, 
Pensacola and Mobile Railroad. These mortgage bonds, I 
understood, amounted to nine hundred and seventy thousand 
dollars or more, and that one hundred and seventeen thousand 
dollars was afterwards raised in like manner from North 
Carolina bonds and taken by Gen. Littlefield to Florida for 
Mr. Swepson, and invested in an interest in these roads or. as 
ho says, to protect the interest already acquired there : that 
the last named road was sold under these mortgage bonds and 
bought in by Dibble and associates, and Mr. Swepson became 
possessed of a large proportion of the stock of this road, and 
was to have this money repaid him, which was to be raised by 
mortgage bonds ot the road. These interests, both of them 
said, had becd transferred by Mr. Swepson to Gen. Littlefield 
for the benefit of Western Division of the Western North 
Carolina Railroad Company, but they both professed to be 
without means of minute information of the contract between 
them, or the naturo of this transfer. Littlefield declared that 
the papers were in his safe in Florida somewhere beyond his 
control. Each seemed inclined to give as little information on 
this subject as possible, and have not since given me the same 
account on this subject. I also understood Swepson to say that 
he had made this investment in Florida for the Western Divi- 
sion of the Western North Carolina Railroad, and claimed to 



1871-72.] Document No. 11. 291 

have done it under authority of a resolution passed by the 
board of directors. This will appear by reference to one of 
the provisions of the settlement made with him, though I had 
understood to the contrary from Gen. Clingman, Col. Pulliain 
and Gen. Littlefield. 

6. In answer to the sixth interrogatory I would state that I 
have never borrowed from Mr. Swepson any bonds or any- 
thing else, and have never seen one of the bonds that I remem- 
ber, nor have I ever borrowed any of the bonds from any o^ e 
I have no doubt but that very nearly all the bonds were used 
exclusively for individual benefit, and though I have no per- 
sonal knowledge of the fact, yet I have no doubt also that the 
bill was procured to be passed ordering the issue of these 
bonds with the view to their being used for individual benefit, 
and without any intention of building a road. I do not know 
anything more of the mode in which this was done than what 
is detailed in my testimony and report. This opinion I 
expressed fully to Gen. Littlefield last fall in London. He 
told me that I was mistaken ; that I did not understand the 
plan fully ; that it was the purpose ultimately to build the 
road, but to do it upon mortgage bonds and otherwise so leave 
it in debt as to enable themselves to buy it in when sold for the 
debt, and in the meantime that the money was to be used in 
speculation and otherwise in order to strengthen themselves 
to buy it. lie told me in the same conversation that they held 
a secret meeting, that is, Swepson and others, at Morganton, 
the night before the organization referred to in my testimony 
heretofore, and consulted about the manner of getting rid of 
the stock, which was subscribed on the books before mentioned 
by me, west of Morganton ; that Mr. Swepson said to them 
that it must be gotten rid of if possible, otherwise it would be 
impossible to carry out their plans, and especially if this stock 
was retained that I would certainly be in the board as one of 
the directors, and that I was stubborn and self-willed, and 
could not be managed, but would ruin everything ; that the 
expedient was hit upon to reject this stock and rule it out 



"29 % 2 Document No. 11. [Session 

localise the five per cent, had not been paid, and the resolu- 
tion then agreed upon was offered next morning. He seemed 
to be in a bad liunior with Swepson at the time. 

7. In answer to the seventh interrogatory, I would state 
that I understood that the general reputation at the time, 
before and since, to be that neither of them was worth much 
property, if any at all. I doubt whether their joint bond for 
a thousand dollars could have been negotiated. Gen. Little- 
field had established the reputation of being reckless as to his 
promises, and in every respect unreliable, and has ever since 
sustained this reputation to the letter. 

8. In answer to the eighth interrogatory I would say that J 
do not know by what means Swepson procured the passage 
of the bills, except as hereinbefore shown, by procuring bogus 
stock, and by certifying falsely as to his solvency, and further 
by certifying that a contract had been made letting the whole 
road to contract — to Littlefield, Tate and Henry. I have been 
furnished from the Executive office with a copy of his certifi- 
cate stating that the entire road had been let to contract. 
This certificate was dated about the 19th day of October, 1868. 
And I understood that there had been a nominal or formal 
contract entered into between some parties, but had never 
seen any one who regarded it as bona fide, or that it was in- 
tended to be carried out. When on settlement with Swepson 
in Washington city with the commission, seeing that his ac- 
counts for monev received bv him for the road did not em- 
brace any sum for five per cent, claimed to have been paid 
upon the subscription of individual stock, T called upon him 
to know why that was, and insisted upon his being charged 
with that sum, insisting that it would amount to upwards of 
one hundred and sixty thousand dollars. He denied at first 
having received any money, said none had been paid him. 
reminded him that he had signed a report with Love ami 
Henry saying that fifteen thousand four hundred dollars bad 
been paid him to my knowledge, and that I was sure that 
Rhum bough and other small subscribers had paid him in per- 



1871-72.] Document No. 11. 293 

son, and that I had understood that he had certified that five 
per cent, on the whole stock subscribed had been paid to him. 
He said that was so, but that was only done in order to get 
the bonds issued, and that every body knew that it was not 
paid, nor intended to be paid, and was only done to get the 
bonds, and he refused to account for it. I reminded him that 
he had had procured nearly a million of bona fide stock, whicli 
had been subscribed by Western men to be paid in work, to 
be rejected contrary to law upon the grounds that five per 
cent, had not been prepaid. He took the report he had made, 
and added to it the sum of four hundred dollars, as having 
been received on eighty shares of stock, and declared that 
was all he had received from any where. That stock went into 
his note or bill at 12 months then going on, when he gave the 
deed of trust for his land, and which is yet unpaid. I then 
insisted on the part of the commission that the individual 
stock must be looked to as a fund for paying the debts and 
prosecuting the work. He (Swepson,) had my cane in his 
hand, holding it up, and said your individual subscription is 
not worth that. We reminded him that it had been but a 
short time since he had certified to the solvency of the whole 
stock, and that it was certainly a very rapid falling off now 
that all of it should prove insolvent. He said that was all 
done to get the bonds, and that every one must have under- 
stood that. He said that as to the individual stock of his 
brother Bob ; that he had used his name without any authori- 
ty, and that he (Bob) could not be held responsible for it. 

0. In answer to the ninth interrogatory, I would say that I 
have no personal knowledge on this subject, except that I have 
seen resolutions on the books of the company, which I under- 
stand the Commissioners already have from the Secretary of 
the Board. 

10. In answer to the tenth interrogatory, I would say that 
all the knowledge I have on this subject has been set forth in 
this narrative, or in my former report already referred to. 

11. In answer to the eleventh interrogatory, I would say 



294 Doccmknt No. 11. [Session 

that, as an evidence that the bulk of the private stock was 
never intended to be paid in, and the numbor of hoiia fide 
stockholders should be kept as small as possible, the stock of 
Hugh Reynolds, of Statesville, subscribed on the day of the 
organization aforesaid, being one hundred thousand dollars, or 
a thousand shares of the three thousand and eighty reported 
that day, and was afterwards stricken off the books by the 
said Swepson, as I am informed and believe, without the 
consent of the said Reynolds. R. F. Simonton, of States- 
ville, was the Secretary of the Eastern Division, and was 
present at the organization, informed me that he and 
Samuel McD. Tate had endorsed a note or bill lor said 
Reynolds for the sum of five thousand dollars, to be dis- 
counted at the National Rank at Raleigh, of which Mr. Swepson 
seemed to have the principal control, and which he accepted 
in payment of the five per cent, on his thousand shares sub- 
scribed. That at the maturity of this bill in ninety days, said 
Reynolds was advised that it was not necessary to pay the 
whole thereof, but might pay such part as was convenient, 
and renew the balance. That twenty five hundred dollars in 
cash was accordingly sent, and a new note for the balance, all 
of which was soon thereafter returned to him, together with 
the original note with a notice, that as he had not been punc- 
tual in paying the whole, his name had been erased, and his 
stock transferred to one who would pay. It was understood 
that Mr. Reynolds wanted a laige contract, and was to work 
out his stock. I remember that at Raleigh in March, 1870, 
while at a stockholder's meeting, and just after the passage of 
the bill appointing the commission, suggested that we must 
now have a new policy inaugurated, we must require an in- 
stalment upon all stock of ten per cent, to be called for and 
paid at our next meeting. This was objected to. I took the 
ground that the Legislature had now w r aived the objection 
which might have been taken to the failure to pay on the 
private stock heretofore. That it was now important to 6ee 
that no new cause of complaint was given. While I was re- 



1871-'72.] Document No. 11. 295 

ducing my motion, calling for the ten per cent., to writing, a 
motion was made and carried for adjournment, which cut off 
my motion. That at a meeting at the Warm Springs about 
June, 1870, Col. Pulliam was present proposing to represent 
his and Mr. Rankin's stock owned in lieu of their shares in the 
Buncombe Turnpike Company heretotore referred to. I was 
present proposing to represent my own shares, and as a proxy 
to represent Montaville Patton's and Smith & Baird's. At 
this meeting I had hoped to get an order passed calling for in- 
stalments, but on organizing, a resolution was offered and car- 
ried disallowing us to represent the stock, under a pretence 
that the railroad company might determine to change the loca- 
tion of the road to the other side of the river, and might not 
use the turnpike, though they had already occupied a portion 
of it, and had reserved no right of recanting the contract. No 
call was made for any instalment, and since that time all or the 
greater portion of said large subscriptions of stock have been 
transferred to two of the directors, who claim to hold it for the 
company. That they have transferred a small portion of it, at 
the instance of the company, to other stockholders in lieu of 
the said Buncombe Turnpike stock. 

12. In answer to the twelfth interrogatory, I would answer, I 
was for many years a Director in the Eastern Division of the 
"Western North Carolina Railroad. I think the Directors gave 
little aid in the whole thiug, almost the entire management 
being committed to the president and engineer. It was diffi- 
cult at any time to get any particular information about the 
business. Anything like a particular enquiry into the business, 
was regarded as officious by, and as casting censure upon, those 
who had the management of it. Judge Henry and I once 
were appointed a committee to investigate the sale of the 
bonds. We spent some days in New York for that purpose. 
We visited Soutter's house, to whom the bonds were said to 
have been sold, we there received no information except what 
we had in substance previously obtained here. We saw noth- 
ing from which we could 6ee any misapplication of the funds. 



996 Document No. 11. [Session 

It seemed that funds had been raised occasionally by drawing 
bonds from there to hypothecate elsewhere, but where and 
upon what terms money was raised upon them, of course we 
could not ascertain. If there was anything wrong in the trans- 
action we could not obtain the evidence of it. Indeed the 
Bankers and Brokers will not give any information, unless in 
the presence of, or at the written request of those for whom 
they had transacted the business. We therefore had to report 
that we had found nothing to prove that there had been any 
misapplication of funds. I was appointed one of a committee 
to investigate the contract, made by Wilson tfc Malone on the 
mountain section. I alone looked into it as well as I could. 
Messrs. Wilson & Malone exhibited to me a copy of the origi- 
nal contract, with the president ot the company. I found that 
it had no time fixed for its completion. It was the usual 
printed contract, the one used with other contractors in which 
it is declared that the time fixed is to be regarded as the es- 
sence of the contract. The blank for the time for completion 
was left blank. This was the case in the original contract or 
duplicate filed in the office, though it was provided in the 
printed contract that the Engineer or Board of Directors could 
any time^hasten the work by putting on additional force. If it 
was found that it was not likely to be finished in the time 
specified, or might declare the contract abandoned for 
non-compliance within the time, but for want of time 
specified, it seemed impossible to force compliance in this way. 
I expressed a doubt to both Messrs. Wilson and Malone, as 
well as to the president, whether it really amounted to any 
contract at all, that they seemed to have any length of time t<> 
do the work in. I asked the president, as well as the parties, 
why the time was left blank '. They said that they did not 
know when the work could be finished, and gave no other 
reason ; said it might be finished in three years, but did not 
know. The time was specified in all the other contracts that 
I had seen. The w r ork seemed to be going on at the time. 
Most of it seemed to have been re-let to 6ub-con tractors ; at 



1871-72.] Document No. 11. 297 

what profit it was re-let, I do not know, hut suppose the sub- 
contractors can very well tell. Mr. Wilson had been the engi- 
neer on the eastern division until within a short time ot his 
taking the contract. I think R. F. Simonton, Hugh Reynolds, 
of Statesville, Mr. Salisbury, a sub-contractor on the moun- 
tain tunnel, Maj. Avery, of Burke, W. F. McKesson, W. W. 
Flemming, can give information on tins subject. I omitted to 
state in the right place the following : When on onr settlement, 
at Washington, it was made to appear to the commissioners 
that Mr. Swepson had sold and conveyed all his estate except 
the lands, afterwards mortgaged to us, and that he had confessed 
a judgment to the Miner's and Mechanic's Bank, for about 
forty thousand dollars, and on which, said lands were subject to 
be sold any day, and that the interest in Florida, consisting of 
stock in the roads, and the right to a part of the pro 
cess of the bonds to be issued, and that this interest was 
encumbered by two judgments, to the federal government, 
amounting to nearly thirty thousand dollars, and that about 
four hundred and seventy thousand dollars of the old mortgage 
bonds, upon the railroad, remained yet to be taken up, and 
that Mr. Swepson's obligation to pay the same was held 
by the public authorities of Florida, who required a com- 
pliance by the first of June next, ensuing, otherwise they would 
set aside the confirmation of the sale of the road at which 
Dibble & Co., had purchased, and under which Swepson 
claimed his interest, thus defeating all the securities existing 
there for the money due our company. After fully looking 
into the matter for weeks, it appeared that it would require 
nearly half a million of dollars to clear away the encumbrances. 
This sum we had not, nor could we raise it. It was proposed 
by R. Y. McAden and R. Swepson in writing, that if a 
compromise was made with Geo. W. Swepson, that they would 
pay the judgment to the Miner's and Planter's Bank. It was 
stated that out of the sale of the first million of the four mill- 
ion of Bonds then preparing to be issued, that the whole of 
these judgments and unpaid claims in Florida should be taken 



298 Document !No. 11. [Session 

up, and a hundred thousand dollars paid to the corporation to 
pay debts existing here due contractors ; that the sale of the 
balance of the bonds should be divided between the road here 
and the Florida Railroads. Seeing then that if we brought 
suit, that it was almost certain that nothing would be realized, 
we made the compromise set forth in my report. If this had 
been carried out in good faith, we think that the road could 
have been finished to Waynesville without leaving a debt 
upon it. Gen. Littletield told me that Swepson told him that 
the Road was never intended to be built. He has told me since 
of many plans proposed by Swepson of defeating the compli- 
ance with this contract and especially that they should ob- 
tain the money, and invest it in banking and otherwise in 
their wives' names. Mr. Swepson has informed me that Lit- 
tlefield had proposed these schemes, but that he does not con- 
cur in them. I have abundant reason to believe them both 
so far as their not allowing this contract to be carried out if 
they can help it. Neither of them has performed any part of 
it as it was to have been done. 

N. W. WOODF1N. 
Subscribed and sworn to before me a Commissioner this 
2nd day of September, 1871. 

J. G. MARTIN. 



Asiieville, X. C, Monday, Sept. 11, 1871. 

Thomas II. Allen being duly sworn was questioned as 
follows : 

Q. How were you employed on the Western Division of the 
Western North Carolina Railroad in summer and fall of 1869 ? 

A. I was employed as assistant engineer, and engaged 
principally in the office at Asheville. 

(}. State all you know or have heard of the contracts for 
work on that road, particularly, as to the contracts with Little- 



1871-'72.] Document No. 11. 299 

Held, Tate, and Drane and McDowell ? Who were the parties 
interested in these contracts and what were their rates ol pay 
as compared with other contracts on said road ? 

A. I was shown two contracts made by the Western Divi- 
sion "Western North Carolina Railroad, one with Col. Tate and 
the other with M. S. Littletield, reference of which I think is 
made in the report of the chief engineer, at the annual meet- 
ing of the stockholders of Western Division Western North 
Carolina Railroad, October 13, 1869, on page 89. The exact 
nature of these contracts I no not now remember, but think 
ihe one made with Littletield was for the construction of the 
main line, and that made with Col. Tate was for the construc- 
tion of the French Broad Branch, Western Division Western 
North Carolina Railroad. Both of these contracts I under- 
stood to be merely nominal, and were made simply in compli- 
ance with some requirements of the charter I copied for the 
chief engineer, a "memorandum of an agreement," made by 
the chief engineer of Western Division Western North Caro- 
lina Railroad, with Drane and McDowell, of Wilmington, N. 
C, for the construction of fifty-five miles of the main line, and 
fortv-five miles of the French Broad Branch of Western Divi- 
sion Western North Carolina Railroad, in which agreement 
prices for each class of work were stipulated. Mr. McDowell 
informed me that the following named gentlemen were to share 
in the profits of said agreement, viz : II. M. Drane, W. H. 
McDowell, Andrew Jackson Jones, Geo. W. Swepson, M. S. 
Littlefield and James C. Turner, and mentioned that there was 
two (2) others interested whom he would not name. The 
prices in this agreement, with the additions made to cover the 
price of stock, contingencies, &q., would, I think, have made 
the cost of the work seventy-five per cent more than was 
afterwards agreed for by other contractors. 

Q. State, it } t ou know, or have heard, any other matter con- 
nected in any way with the objects of this investigation ? 

A. I know nothing, and what I have heard has been of such 



300 Doccmbnt No. 11. [Session 

an indefinite character I could not specify any particular 
matter. 

TIIOS. II. ALLEN. 
Subscribed and sworn to before me, September 12, 1S71. 

J. G. MARTIN, 
Commission- r. 

Major J. 0. Turner, Chief Engineer of the Western Divis- 
ion of* the Western North Carolina Railroad, was duly sworn 
and testified : 

Q. State all you know of the organization of the Western 
Division of the Western North Carolina Railroad Company, 
and all you know as to subscriptions for stock in said company, 
by whom taken, and how and when paid, and also as to letting 
of contracts for the building of the road, or any part of it, par 
ticularly the contracts with Littlefield and Tate, and with 
Dranetfc McDowell with copies of contracts. 

A. In answer to the first interrogatory, I was present at the 
organization in Morganton on the 13th day of October, 180^. 
There were 45 stockholders present, either in person or proxy, 
representing shares of stock, on which I was informed by the 
president, Mr. Swepson, that 5 per cent, of said stock had 
been paid either in cash or drafts. After the election of other 
officers, I was elected the chief engineer of the company, and 
as such entered upon its duties'. Amongst other things I was 
summoned to Raleigh by the president, George W. Swepson, 
Esq., and directed to prepare contracts for the entire Western 
Division of said railroad with instructions to draw the contracts so 
as to pay the contractors, the estimated cost in gold or its equiv- 
alent, of said road, according to an estimate I had previously 
made for the Western North Carolina Railroad Company as 
its chief engineer in 1SC>(). See copy of my report of sur- 
veys made to the called meeting of stockholders, pages 4<» and 
4'J, and accordingly contracts were filled out upon blanks and 
specifications previously prepared by me in 1856, of which the 
accompanying paper marked A is a copy. 



1871-72.] Document No. 11. 301 

One contract to M. S. Littlefield lor the entire main line was 
from French Broad to the Tennessee line, near Ducktown, a 
distance of 135 miles ; the other to Col. S. McDowell Tate 
npon the same terms and conditions for the branch road down 
the French Broad to Faint Eock. These contracts were left 
in mv possession until the winter oi 1869, when I was ordered 
to send or bring them to Washington City for the use ol the 
commissioners appointed to settle with Goorge "W. Swepson 
and others, since which time I have not seen them. 

In the above named contracts it was reserved to the com- 
pany to re-let to any other parties they might choose ; but if 
these contracts with Littlefield & Tate can be produced, as I 
hope they will, they will speak for themselves. These con- 
tracts were intended only to comply with the letter of the 
charter, as I always understood. Now, in regard to the con- 
tract with Drane & McDowell at the time of the letting on 
the 10th of June, 1868; Drane & McDowell did not bid for 
the work as other bidders did. The president took me to his 
room on the night of the 11th of June, and then told 
me that he wanted me to prepare a contract with Drane 
& McDowell for the entire one hundred miles then ready 
for letting, to wit : the 45 miles on the French Broad 
Branch Road, and the 55 miles of the main line, as follows, to 
wit : to irive them the cash estimated cost of the said work, and 
to add thereto 50 per cent, in the stock of the company, so that 
upon a final estimate one third of the whole amount due shall 
be paid in the stock of the company. A copy of this agree- 
ment to make a contract is herwith submitted, marked B. 
Upon meeting Mr. Drane the next day, I wrote out the agree- 
ment for contract, as directed by Mr. Swepson, which wa6 
copied by Capt. Allen, assistant engineer, and signed by T myself 
as chief engineer, and Drane & McDowell as contractors. Mr. 
Drane told me during this time, that the profits of the work 
was to be divided between Drane & McDowell, A. J. Jones, 
Swepson, Littlefield and myself, as well as two others whom 
lie did not name. This was the first intimation that I was to 



302 Document No. 11. [Session 

share in the profits, as Mr. Swepson had never, on any occasion, 
mentioned it to me. I wrote out the agreement hastily -which 
was signed and gave a copy to Mr. Drane, who followed Mr. 
Swepson to New York for his approval, hut he, Drane, after 
examining the agreement more carefully, found features in it 
to which lie objected, and more particularly because there was 
not margin enough for profits, whereupon I M-as telegraphed 
for, by Mr. Swepson, to repair immediately to New York. 
Upon arriving there, he, Mr. Swepson, said the other parties 
had gone elsewhere, and that he did not want me. I therefore 
returned to Baltimore ; had scarcely arrived there when I was 
telegraphed ro return forthwith. I declined going back then, 
because I was sick, but another dispatch was received urging 
me to return, as the parties had arrived, and if possible to come 
that night. I went on, and met them. I Mas importuned by 
all parties to amend the agreement as desired by the contrac- 
ting parties. I declined to do so until I returned to Asheville 
and examine the estimates. Mr. Drane became offended and 
spoke angrily about it. Still I refused, and returned and pre- 
pared another agreement which I have now, but differing only 
and mainly in the cost of the 55 miles of the main line, thus 
reducing its cost $5,768.56 per mile. This agreement was not 
signed, and if any other action in reference to this matter wa6 
had, I am not advised. See copies of agreement to contract. 
1. Soon after the organization of the [Board of Directors 
and under a resolution adopted by them at Salisbury, 
and also at Asheville, the President and Chief Engineer 
were authorized to let out the work on the entire 
Western Division so soon as it M-as ready. Accordingly 
bids were invited for the graduation, masonry and bridge 
superstructure on the first one hundred miles of road when 
ready for letting, up to the 10th of June, 1S60. Many propo- 
sals were received and opened on that day, and are now on 
file in the office. The president, without making any awards 
or giving any special instructions except that I should not give 
any contracts to some parties he named, and to others only 



1871-72.] Document No. 11. 30?, 

one section, &c, went home and left me to award the con- 
tracts to such parties as their bids justified, and to act in the 
whole matter as my judgment dictated. The bids generally 
run too high, but awards were made after modifications of the 
bids had been agreed upon. I will here state that the work 
could have been advertised and let to contract long before it 
was, if I had obtained permission from the president ; but 
when the contracts were awarded, I was requested both ver- 
bally and by letter ordered to hold back the progress of the 
work, as per letter of the 30th of June, herewith submitted, as 
well as other letters not now at hand. The contracts were not 
signed by Mr. Swepson during his presidency, for the alleged 
reason that he was always in such a hurry as not to have time. 
They were not signed by Gen. Littlefield for a similar reason, 
although it was urged by me whenever I could with propriety 
ask it. They were not signed by Col. Davidson as president 
pro tern., or Major Rollins, for the reason, that one of the for- 
mer presidents had the seal of the company, and it could not 
be found until recently. The contracts under the order of the 
board were all prepared, with a few exceptions, by the Chief 
Engineer and signed by many of the contractors, but none 
have as yet been signed by the president of this company. 
Upon all the work awarded, except some bridge masonn 7 , and 
grading, work has been done and estimates made by the resi- 
dent engineers in the immediate charge of the work and cor- 
rected if necessary by the principal, assistant, or division en- 
gineer and approved by the Chief Engineer. In the contracts 
with Littlefield and Tate my recollection is, that no part of the 
payments was to be made in stock, and the same was true as 
to all the other contracts except as* to Yiekers who claims stock 
where the question is in dispute and as to Fagg who was to be 
paid on a small contract for lime, I think one-fourth in stock. 
When Mr. Swepson instructed me to prepare the contracts 
with Littlefield and Tate, and with Drane & McDowell, he 
told me they were not to be made public then. 

2. Did you ever have any conversation or conversations with 



304 Document No. 11. Sffsion 

G. W. Swepson, in relation to the sale of the N. C. State 
bonds, issued for the beneiit of the Western Division of the 
\V. N. C. Railroad. If so, state when and where these conver- 
sations were held, and the substance of them \ 

To the second interrogation, my answer is, that I had frequent 
conversations, both before and alter their issue, in Raleigh, 
Asheville and elsewhere. His desire, as stated to me, was to 
obtain the bonds and sell them as soon as practicable, and 
invest the proceeds in the bonds of the United States, so that 
at any time they might be converted into cash, if the prosecu- 
tion of the work seemed to demand it. And ; further, in 
making the surveys, preparatory to a re-letting ol the work, he 
urged upon me to be as economical as possible, as the money 
advanced for that purpose was from his private funds, as the 
bonds had not been sold. I was impressed with the truth ot 
that statement until alter his resignation of the presidency. 

3. Do you know or have you heard ot any State bonds or 
money or anything ot a value being used by any one to in- 
fluence the Legislature, or any Convention, or any officers of the 
State government or any officer of a railroad, in which the 
State has an interest, in their official conduct ! 

In answer to the 3d, 1 know ot none. I have heard various 
rumors. Mr. Swepson said it had, and would cost him a large 
sum to obtain the amendment to the charter. This is the only 
definite remark that 1 remember. 

4. Do you know of any State bonds belonging to any rail- 
road, having been used by any person to their own advantage I 

In answer to the 4th interrogatory, my answer is : No, ex- 
cept from admissions by Mr. Swepson, to the Wood fin Com- 
mission and the general rumors. 

6. State all you know about the purchase of Florida railroad 
stocks or bonds, by G-. W. Swepson ; the time when the price 
paid, and out ol what funds the money was paid, and whether 
the purchase was made for Swepson, individually, or tor the 
benefit of the West Division of the W. N. 0. Railroad 1 

To the 5th, my answer is I know nothing, but I think Mr. 



187*-'?2.] Document No. 11. 305 

Swepson told me after pointing out the advantages of its pur- 
chase, that he had bought it for himself and that he and his 
brother could raise $900,000, from their own means. 

G. State whether any of the bonds issued by the State, for 
the benefit of the Western Division of the Western North Car- 
olina Railroad, were ever borrowed by you or any other per- 
son from Mr. Swepson, or any way used or disposed of for the 
benefit of individuals ? 

To the 6th, I borrowed none nor do I know of any other 
persons who did, but have heard of others but cannot name 
any person. 

7. State the general reputation as to solvency of M. S. 
Littlefield and R. M. Henry, at the time they made subscrip. 
tions to the stock of said road ? 

To the 7th, the general reputation of M. S. Littlefield I do 
not know, but I was informed by Col. Tate, Mr. Swepson and 
Gen. Littlefield himself, that he had control of large amounts 
of capital. In regard to Gori. E. M. Henry, I had no knowl- 
edge nor did I hear anything said, except that Geo. W. Swep- 
son made the subscription in Gen. R. M. Henry's name. 

8. State by what means G. W. Swepson, president, procured 
the State bonds to be issued for the benefit of his road ? 

Answer. I do not know and have only the general rumor 
in the State. 

9. Was there any resolutions passed by the Board of Direc- 
tors of said road, directing how, when, where, by whom, and 
at what price, the bonds should be sold ? If so give the date 
and substance of such resolution or resolutions : 

Answer, There was a resolution passed at Salisbury on the 
eleventh of December, 1808, and another in Asheville, July 
18G9. Copies of which I understand the commissioners have. 

10. State all you know as to the sale of State bonds by G. 
W. Swepson or others '. 

Answer, Ofthatlonly know from general rumor, except 
that Mi". Swepson always led me to believe up to about the 
time ol iiis resignation tliat none or but few had been sold. I 

20 



806 Document No. 11. [Session 

will here add that while Mr. Swepson seemed to give me ! Ls 
confidence about unimportant matters; lie did not extend that 
confidence usually existing between the President of a Rail- 
road Company and its Chief Engineer ; as for instance he pro- 
fessed a perfect willingness to let the contracts as soon ax 
ready, but when the time came he would endeavor to impress 
the Directory that I was in too much of a hurry and thus delay 
until some of the Directory threatened to resign unless the 
letting took place, and further he would make statements to 
me in the office in regard to the work, which, whenever I 
would go on the street, I would hear from others exactly the 
contrary as coming from him. 

11. State any other matters that you know in any wav con- 
nected with the object ot this investigation as to the Western 
North Carolina Kail road, and name the parties to whom you 
were not to give contracts or only small ones i 

Answer, At present I can recall nothing else connected with 
the object of this investigation. Mr. GL W. Swepson directed 
me not to give any contract to Col. Tate, and only one section 
to Mr Lucius Welsh. 

Do you know or have you heard <»r any contract on this 
road, being promised by Mr. Swepson to any member ot the 
Legislature, tor said member or his friends ( 

Answer. Mr. Tickers told me that Mr. Sweet, Senator from 
Craven, I believe, told him, (Tickers,) that Mr. Swepson had 
promised Mr. Sweet a large contract, and Mr. Lucius Welsh 
told me that Mr. Swepson had promised his brother, a member 
from J lay wood, for him, as large a contract as he desired, and 
complained that he could get only one section. And Col. 
Ames, also a member of the Legislature, told me he was to have 
ai much work as he wanted as Mr. Swepson had so promised 
him. 

12. State all you know or have heard ot matters connected 
with the Eastern Division of the Western North Carolina 
Railroad Company within the objects of this investigation. 

A. In regard to the Eastern Division I can state that I was 



1871-72.] Document No. 11. 307 

the chief engineer of the Western North Carolina Railroad 
Company when the contract with Crockford & Malone was 
made, and believe I was mainly instrumental in inducing: them 
to take the contract at its estimated cost, to wit : $1,320,047. 
One-third of this sum was to be paid in the stock of the com- 
pany. 

In 1863 I resigned, because the governor appointed a board 
of directors who entertained views in regard to railroad affairs 
different from mine, and James W. Wilson, former assistant 
engineer, was appointed chief engineer. Thus matters con- 
tinued until it was deemed proper to start the work on the 
mountains after the close of the war. In the meantime, Maj. 
Wilson had made some changes in the construction of the 
work, and I think shortened the viaducts and substituted 
wooden bridges, where stone viaducts were estimated for, and 
increased the estimated cost 50 per cent, on the whole contract, 
and soon after resigned ; whereupon Col. Wm. A. Eliason was 
appointed chief engineer, and then James W. Wilson became 
the contractor in place of Col. Crockford. The president. 
Col. Tate, informed me that the contract with the new firm 
was the same as that with Crockford & Malone, except the 
addition of 50 per cent, to the contract price, was made as a 
consideration for the difference between gold and currency, 
as well as the difference in the price of labor and material. I 
believe the same principle was applied to all contracts east of 
the mountains after the resumption of the work. 

13. State all you know or have heard of any opinion of the 
Supreme Court as to the constitutionality of any law in relation 
to the bonds issued, or to be issued, by the State. 

A. In regard to the 13th interrogatory, I can only state 
that in a conversation whilst the question of the constitution- 
ality of the charter of the Chapel Hill railroad was pending, 
or after the decision of the court on that question, Mr. Swep- 
son told me in New York, on more than one occasion, that he 
had in his pocket a decision adverse to the one given and pub- 



308 Document No. 11. Ses£ 

lished by the court, and that it had cost a large amount to ob- 
tain the published decision. 

14-. State all you know of a contract claimed by Hunt due 
Mr. Swepson from Hunt previous to doing any work on the 
Western Division of the Western North Carolina Railroad, on 
which Hunt had done about $100 worth of work in grading, 
but not estimated. 

15. Have you been approached at any time as chief engineer 
of this road toward a contract or contracts to parties for valu- 
able consideration or to use your influence for that purpos 

A. To the 15th interrogatory, I must state that 1 never have 
been so approached for that purpose, except on two occasion, 
once in Raleigh, where Mr. McDonald, of Cabarrus, offered 
me $100,000 to award the contract for building the Western 
Division of this road, at my estimates made in 1860, to him 
or his son. And again in Asheville, 1 was offered a large 
interest in the Warm Springs property by J. 1J. Rumbough to 
award the contract to him lor building the French Broad 
Branch of said road. I never have received, or expected to 
receive, any valuable consideration from any contractor or otfier 
person on the road, nor am I, nor have I ever been u partner, 
or otherwise interested in any contract on the road. 

10. Do you know, or have you heard, of any officer of any 
Railroad in which the State has an interest, being charged with 
letting contracts at fraudulent or exorbitant prices, or of any 
contract being let where any officer of the company had 
received or was to receive anything of value on account of said 
contract i 

A. My reply is, that as floating rumors charge, there are 
Rings on this road by which some contractors are t<> be bene- 
fited and others injured; that some contractors have been 
intentionally over-estimated, whilst others have been under- 
estimated. Jt any engineer on the line was guilty of any dcri- 
liction of duty of that kind, I am not aware of it, except in one 
instance, that I think occurred from ignorance, but 1 had the 
mistakes rectified and the engineer discharged as soon as 1 



1S71-72.] Document No. 11. 309 

discoverod it. In this instance the contractors were over-esti- 
mated which may have given rise to this charge. 

IT. Was there any resolution or other instruction from the 
Board of Directors requiring or instructing you to let the con- 
tracts to the lowest bidder or else to readvertise? 

A. There was none. There were two resolutions, one passed 
at Salisbury and the other at Asheville, copies of which I here- 
to append, as follows : 

"On motion of Gen. T. L. Clingman it was resolved that the 
President and Chief Engineer be and they are hereby author- 
ized to let out by contract the whole of the road forthwith, upon 
condition, nevertheless, that the right is reserved to relet the 
whole, or any part ot the said work at any time hereafter that 
they may see tit." 

Adopted at Morganton, K C, Oct. 15th, 1868. 

"Besolved, That in order that the work may be let out on 
terms the most advantageous to the company and public, the 
chief engineer be instructed to examined carefully and report 
on the bids offered, together with his estimates of each section 
of the work.' 1 

In this connection I will add that no contract was let by 
me to any contractor. On one occasion in Raleigh during 
the session of the Legislature, Mr. Swepson asked me to stop 
in Morganton on my way to Asheville and tell Col. Tate that 
he would give him and Hunt and Scales with Col. Eliason 
the contract for building the French Broad Branch Road. I 
met Mr. Hunt in Salisbury and told him. Previous to this 
time Mr. Hunt, Maj. Scales and G. W. Swepson had a con- 
tract for grading on the Eastern Division, but Mr. Swepson 
before the work was completed sold his interest in said con- 
tract to the other parties, as he told me, Messrs. Hunt, Scales, 
Eliason and Tate were at the leting on our Boad and a bid 
was submitted by them for the entire French Broad Branch 



310 Document No. 11. [Session 

in the name of another party. I approached Mr Swepson on 
the subject "whereupon he answered he would give Tate no 
contract, using very emphatic words witli unmistakable ex- 
pletives. Sometime after this I received an open letter from 
Mr. Swepson, dated 15th August, 1859, (a copy is herewith 
presented marked C,) ordering me to give Mr. Hunt the very 
best portion of the French Broad Branch such as suited him, 
and when I come to Asheville we will arrange with Mr. Hunt 
as to the terms, the amount of work, &c, Arc. I took him 
(Hunt) to my office and showed him a profile of the estimated 
quantities of all the work then unlet and gave him a profile, 
told him that he might go and look at the work and choose 
for himself and report to me, he never came into my office 
afterward or informed me what he wanted, but went to one 
of the resident engineers and told him that I wanted him to 
lay out certain work for him (Hunt) which was untrue, as no 
particular section had been designated to him or asked for by 
him and until that was done I did not choose to let any man 
work, he never came near me to ask any explanation although 
I notified him in writing that 1 was ready to have laid off 
any work he might select. Soon after that, I was ordered by 
the President, Gen. M. S. Littlefield, to suspend all work on 
the French Broad Branch above Phillip Rhor's work on the 
south side of the French Broad River but subsequently Col. 
Ames' work was excepted from this order, consequently I con- 
tinued all other work begun, until the contractors discon- 
tinued for the wantof money. The work claimed by Hunt or 
on which he had built shanties was included in this suspension. 
After Hunts application for work I heard from reliable author- 
ity that he reported to various parties that he had gotten all 
the contracts between Asheville and Paint Bock without bid- 
ding for them, thereby creating dissatisfaction with the con- 
tractors who had contracts, lie further proposed to sublet work 
to others, I must state here that the order to suspend arose 
from the supposed necessity of making another location on the 
south side of the river which was made and attended with 



1871-72.] Document No. 11. 311 

great expense but for which I do not consider myself at all 
responsible, for although I was not satisfied with the previously 
located line, I could have had the alterations made by the 
resident engineer in charge without additional expense. But 
it is generally conceeded that the relocation was ordered for 
the purpose of delay so that officers not prepared to pay tor 
work done could retain the money in their own hands, Maj. W. 
W. Rollins informed me that the $18,000, claimed by Swep- 
son to have been paid to Hunt as an advance upon the French 
Broad Branch, for work done on said road, was subsequently 
admitted to have been paid ; or receipted for to settle a debt at 
exorbitant or fraudulent prices, and rarely at the prices bid, but 
generally below, at prices agreed upon between us and in no 
case at prices higher than my estimate except one, where the 
price tor rock was 00 cents per yard higher, but even then it 
was one dollar per yard lower than the competing bid, there 
were two cases in which I let a light section each, to two men 
at prices lower than my estimate, but although I allowed them 
higher prices than their bids, I did so because they were poor, 
and it was a question whether the company should pay enough 
to pay expenses, or let the people from whom they got sup- 
plies go without their pay, and I will further add, that if the 
whole work had been my own I would not have acted differ- 
ently from what I did. 

JAMES C. TURNER. 
Subscribed and sworn to before me Sept. 20th, 1871. 

J. G. MARTIN. 
Commissioner. 

Statement of W. W. Rollins, before the commission, Sept. 
1, 1871. 

Q. State all you know of the organization of the Western 
Division of the Western North Carolina Railroad, and all you 
know as to subscription for stock in 6aid company, by whom 
taken, and how and when paid, and also, as to the letting of 
contracts for the building of said road, or any part thereof ? 



312 DoouMEwr No. 11. [Session 

A. 1. I -was not present at the organization of the Western 

Division of the Western North Carolina Railroad. 

2. The stock was endorsed by various individuals. 

3. A large majority having been taken by Messrs. Littlefield, 

Swepson and Henry. 

4. I was informed that a large number ot the small stock- 
holders paid live per centum in cash on the amount subscribed, 
Littlefield having paid his proportion (five per cent.) by draft 
on New York. 

5. The contracts were let lor a portion of the work on said 
road, in June, 1869. I know nothing, however, ot the lettings 
previous to that time. 

Q. Did you have any conversation with (i. \Y. Swepson, in 
the latter part of the summer or fall of 1869, in relation to 
the sale of bonds (State) North Carolina, issued for the benefit 
of the company of which he was president '. If so, state the 
substance ot such conversation '. 

A. In the fall of 1869, I urged upon Mr. Swepson, to in- 
crease the force upon the road. He said it could not be done, 
as he had sold none ot the bonds, and that it would not do to 
put them upon the market at that time. 

Q. Do you know, or have you heard of any Stale bonds, 
money or other thing of value, being used by any one, to influ- 
ence the legislature, or convention, or any officer of the State 
government, or any officer of a railroad, in which the State has 
an interest, in their official conduct '. 

A. I know nothing of my own personal knowledge. [How- 
ever, I have heard that money and other articles, bave been 
used for the purposes above stated in this question. 

5. What was the general reputation as to the solvency of 
the individual stockholders, reported by Swepson, to the stock- 
holders meeting in May, 1869 1 

A. I have no recollection of his having made any report, in 
this connection, at the meeting in May, 1 s<;<*. 

5. State what transfers, it any, have been made ot the stock 
of Littlefield, Robert Swepson, and Henry and Swepson '. 



1S71-72.] Document Mo. 11. S13 

A. The stock of Swepson was first transferred to Littlefield, 
and lie transferred to Davidson and Rollins, in trust for the 
company. The stock of Littlefield was transferred to Henry, 

(Judge.) and Henry transferred the same to tm\ in trust for 
the company, which stock I hold for said purpose, except small 
amounts, which I have transferred to responsible parties, by 
order of the board of directors. A portion of the stock, -±90 
shares, of that transferred to Davidson and Rollins, has been 
transferred to the Buncombe Turnpike Company, by order of 
board of directors, balance due said Turnpike Company, for 
the purchase of their road from Asheville to Paint Rock, N". C. 

G. Was there much delay in the lettings of the contracts for 
the road ? and if so, state the reasons thereof \ 

A. There was delay. The reasons assigned, which were on 
account of the statements of Mr. Swepson, that the bonds had 
not been sold, and that it would not do to go on with t'.ie work 
before the bonds were put on the market '. 

7. State all the circumstances which you know connected 
with the election of Gen. Littlefield as President of the road? 
Was there any understanding or agreement to that effect made 
by any parties in New York, if so, who and when ? Was 
there any caucus on the subject in Asheville before the elec- 
tion, if so, what was done there? 

A. At the stockholders meeting; in Asheville, in October 
1869, Mr. Swepson declined the re-nomination and declared 
that he would not serve it re-elected, upon which Gen. Little- 
field declared himself a candidate for the Presidency and 
there being no opposition, he received a majority of the votes 
present, and was declared duly elected President by the meet- 
ing. There was no agreement or understanding with any 
parties in Xew York to my knowledge. There was a meet- 
ing the night before the election in Asheville, at which Gen. 
Littlefield stated that, if Swepson declined to be a candidate, 
he would become one, for the position of President. 1 had no 
previous knowledge of Mr. Swepson's declining to become a 
candidate for the Presidencv of the road. 



314 Document* No. 11. [Session 

8. State the circumstances connected with the passage of 
the ivs< .hit ion, at the- meeting of the stockholders October 
1869, appointing a committee to examine and settle the ac- 
accounts of the President '{ 

A. The resolution ae first introduced to settle the accounts 
of Mr. Swepeon, retiring President, designated the names of 
persons, to serve on such committee, but was amended, direct- 
in-- the chair to appoint two persons, to act together with the 
then President, to proceed to adjust and settle the accounts 
of the retiring President, Mr. SwepBOn. And as amended 
•was passed in the meeting. 

9. State whether or not, in your opinion, the prices agreed 
upon in the contracts were fair and reasonable, and had y 
means for knowing what the prices were ( 

A. The contracts so far as I know, were fair and reasonable. 
However. I had no means of knowing until after they were 
awarded. 

10. I ).» you know anything of payments made to contractors- 
and others in New York ? 

A. I had information from the parties themselves, that pay- 
ment was made to W. Ames, M. J. Fagg, <i. M. Roberta and 
Col. Pnlliam, in Xew York-. 

11. State if you know of any steps that were taken to pre 
vent the return of the bonds into the treasury of the State '. 

A. I learned that there were such steps taken, but know 
nothing of my own known knowledge in the premises, not 
being in either New York or Washington, at the time. 

12. Do you know, or hare you heard of anything in any 
way connected with the object of this investigation, in refer 
ence to the Eastern Division of the W. X. C. Railroad i 

A. 1 do not. 

Q. Do you know, or have you heard anything of B sale of 
bonds belonging to the Eastern Division by Dr. Mott, or Col. 
Tate, or other persons, for a less amount than their real value, 
or than was ottered by others, it so, state all the circumstances ? 

A. I heard Mr. Woodfin say, that the stock bonds had been 



1S71-72. • Document. No. 11. 315 

offered, for the same as special tax bonds, at 22 cents, and that 
he had protested against the sale of them at that price, as he 
(Woodfin) had found parties who would take them at 30 cents, 
or 35 cents. If the bonds have been sold since, I do not 
know at what prices they were sold. I have no personal 
knowledge of the sale of the bonds, by either Dr. Mott, or 
Col. Tate. 

W. W. ROLLINS. 






316 



[)<>(l'MK.\T No. 11. 



: See 



ACCOUNT \. 



Account of G. W. Swejyson with M. S. LitUej 



L868. 

June 
July 
Sept. 
( >ct. 

i. 

a 

Nov. 
« 

it 

a 
u 
a 
a 
a 
.1 

it 
u 

a 
a 



Dec. 

a 
u 

Jan. 
« 

a 

.. 

u 

u 



17 

1 

L5 

- 

( .i 
2G 

1 
o 
u 
a 
cc 

H 
« 

17 
« 

21 
i' 

25 

a 

28 



To 

a 
« 

a 

a 

« 

(. 
a 
a 
a 
(t 
a 
.< 

« 

a 

u 
a 
a 



I 1 

1- 
a 



21 



11 



A. "\V. Tourer* 

Jos. w. Holaen, 

Note M. S. L. 

J. T. Deweese and \i 

J. Wynne, 
J. A. Hyinan, 
1!. Latiin, 

M. S. L., ami others, 






(( 



Protest i'ev* 1 1 , 1 1 I 23d 

Telegram L.99. 

J. T. Deweese, 
(< « 

M. S. Littlefield, 

S. McD. Tate. This 
money was borrowed 
of Col. Tate lor the 
benefit <■! Gen. L. 
and not charged till 
returned to Col. Tate, 

.1.11. 1 1 arris. 

A. .1. Joms. 

Diamonds $750 $800, 



" M. S. L., and others, 









'• Protest Ire-. 
" Jno. A. Ilvman. 







Int. to 1 






20 i 


200 


32 


27 


200 




31 


33 


4, 




52S 




300 




37 




ram 




62 




; 




59 


i.; 


285 




2:':;:. 


:.J4<; 


35 




3,087 


80 




:'..• -7 


80 




3,087 


80 


2,394 




3,087 


3 






3,0S7 


30 






3,087 


80 






L3 


09 




1 1 


;>. 








1 L,000 




1,76 




1,800 








!.< 




304 


2:. 


14,< 




1.507 


:;4 


50 




:. 


i«; 


2,500 








1.:.:." 




409 
268 


55 


2,851 


12 






1,500 








6,188 


63 


1,087 


65 


4,390 


56 






6 


:;i 


;-'. 


67 


E 




46 


• > 



Session.] 



Document No. 11. 



317 



A CCOUN T A .— (C« >nti nu ed .) 
Account of G. W. Swbpson with J/. S. Llttlefield. 



1869. 

Jan. 13 
28 
30 

1 

8 

L7 

18 

a 

20 
21 
21 

a 
a 



Feb. 

a 
a 
a 
a 
a 
a 
ct 
u 
u 

a 

" 27 
March 6 

8 

9 

29 



To 



u 
C( 

u 
a 
a 

u 



« 



April 1 



« 
C( 

M 
CI 

.. 

May 

u 
u 
a 

June 

u 



Q 

O 

12 



L3 

2V 
3 

14 
25 
28 
5 
11 



J. H. Harris, 
James Sinclair, 
John A. Ilyman, 
J. 11. Harris, 
Note favor of Jas. Smith 
Geo. Z. French, 
Jehu II. Davis, 
H. Eppes, 
Jos. W. Holden, 
J. H. Harris, 
A. J. Iiutjes, 
II. Downing, 
M. S. Jittletiekl in N. 

York, 
M. S. Littletield, by 

Telegram, 
J. II. Harris, 

Fstes and 



other; 



L. G 

a a a 

A. J. Jones, 
E. K. Proctor, 
A. J. Jones, 
Jos. C. Abbott, 
Jas. Sinclair, 
T. L. Clingman, 
J no. A. llvraan, 
T. Foster," 
M. S. Littletield, 



" Jno. (ratlin, 

" T. L. Clingman, 

" James Sinclair, 

"J. C. Abbott, ' 

" G. V. Peck, ?-^-' 8i 5 coo 



$ 500 
300 
500 
500 

1,600 
500 

1,000 

95 

750 

GOO 

150 

4,000 



2,000 



2,000 
5,850 
5,000 
5,000 
5,000 

300 

2,500 

10,000 

2,500 

200 

600 

25,000 

2,000 

5,000 

4,000 

500 
1,000 
1,000 

5(10 

loo 

5,000 
4,500 



Int. to Oct. 
20, 1869. 



$ 46 

26 
13 
43 
131 
40 
81 



33 
30 
50 
50 
94 



7 70 
60 

48 



667 



456 



750 

371 

37 



1,015 

13 
39 

1,575 

693 

30 

55 

52 

24 

4 

225 

190 



55 



50 



76 



40 
60 



00 



34 
33 
76 

50 



US 



Document 11. 



[Session 



ACCOUNT A.— (Continued.) 
Ace&unt of M. S. Litttefidd \oith G. II'. Swepson. 



1869 










Int. to Oct. 




15 


To L. G. Estes, 


$3,000 




20, 18<V<. 
* 




June 


126 




u 


L6 


" Note .las. Sinclair, 


600 




25 




it 


IT " Estes t.v French, 


10,456 


87 






it 


" k> French & Estes, 


10,456 


^7 


864 


4" 


a 


22 " W. M. Churchill, tor 


i 
i 










M. S. L. 


500 




20 




July 


2 " M. S. Littlefield, 


500 




18 


15 


C( 


9 


" Interest, etc., on notes 














paid J. G. W. & Co., 


274 


90 


9 


35 


u 


21 


" 2 Notes, M. S. L. (E. 












W. G., security.) 


4. 




120 




.. 


24 


" A. W. Tourgee and pro- 














test, 


3,5< »2 


55 


101 50 


Sept. 


9 


" 2 Notes, M. S. L., 


4,000 




68 




« 


30 


" J. W. Heck. (Of this 
sum ten thousand dol- 
lars was money loaned 
by Col. Heck to Gen. 
Littlefield some time 






% 








before. | 


L5,000 


I".", 




Oct. 


2.s 


" Jno. P. Branch, 


1,510 






« 


:;i 


"Jos. C. Abbott, 


5,000 


(IS 


$ 17,097 






$241,354 


83 



CREDITS. 



1868. 

Nov. 7 By Cash, 
" 19 .. 

1 869. 



Feb. 8 



** 1 ^eduction made by J, 
T. Deweese, 



$ 4,000 
9,500 


1 1 


1,600 




$ 15,000 



$ 95866 
1,046 



134 



'.•I 



$ 1.6:5s 6.. 



•Session.] 



Document, 11. 



319 



ACCOl'NT A.— (Continued.) 
Account of M. 8. LitUejidd with G. IV. Swepson. 



Amount principal and interest, 
" credits " " 

Balance, 



$258,45191 
16,738 60 




I certify that the above account is a true copy from the orig- 
inal, the vouchers, etc., of which were in my possession, at the 
time it was first made out and that it is correct to the best of 
any knowledge and belief. G. ROSENTHAL. 



yn\ Document Kg. 11. [Session 



BOND ACCOUNT OF G. W. 8WEPSON. 

55 bonds hypothecated witli ("lews & Co., on account of 
Byron Laflin. 
192 bonds hypothecated to L. P. Payne & Co., as appears 
by the report ot Gen. Littlefield. The papers for 
them were turned over to Gen. L. 
100 bonds sold by Payne & Co., on purchase and sale of 
bonds for which I only realized $10,009.62. 
In bonds loaned to Gen. Martindale, voucher turned over 

to ( Jen, Littlefield. 
20 bonds loaned to W. A. Moore; voucher turned over to 

Gen. L. 
170 bonds lust with J no. P. J .ranch, on purchase and sale 
of bonds. Branch and myself disagree as to the 
nmnber, he saying it was only 100. We were part- 
ners in the purchase of bonds. 
75 bonds handed II. M. Rice for Gen. Littlefield. 
100 bonds delivered A. J. Jones by Soutter & Co. (loaned 

him.) 
121 bonds delivered to Gen. Littlefield, and by him handed 

to Byron Laflin. 
75 bonds loaned General Littlefield and sold pr hypothe- 
cated by him to one (apt. Hudson. 
100 bonds delivered to Gen. Littlefield in Jersey City, after 

his election as President. 
200 bonds, about this number, sold through Howes & Macy, 
netting between fifty and sixty thousand dollars, after 
paying a loss of J. I\ Branch A: Co., of about s'.hmhi. 
60 bonds, 1 cannot now remember what disposition I made 
ot them. 



1,27s 

This makes tl) • lull amount of bone's which I was short 
in my bond a?co the settlement ot my account as 



1871-72.] Document No. 11. 321 

President of the Woodfin Commission, I offered to return to 
them the above number of bonds, (1278,) which they declined 
to receive, but took in lieu thereof the sum of one hundred 
and fifty thousand dollars ($150,000) that being about the net 
market value of that number of bonds in New York at the 
time of the settlement. This money had been paid to them in 
full. Besides the loss of fifty-five (55) bonds placed in the 
hands of Clews <$c Co., for account of Gen. Byron Laflin, there 
was an additional loss of over twenty-one thousand dollars 
($21,000) in cash. The twenty (20) bonds loaned W. A. Moore 
were not only totally lost, but between eight and nine thou- 
sand dollars in money, besides, which I had to secure by a 
deposit of money, and besides the ten (10) bonds loaned to 
Gen. Martindale, which were also a total loss, I had to 
secure, as in the case of W. A. Moore, a loss in money of 
nearly sixteen thousand dollars ($16,000.) I had to pay the 
monies because I not only loaned them the bonds, but because 
their security to their bankers for any loss which might accrue 
by the purchase and sale of bonds. The vouchers for these 
bonds were delivered to Gen. Littlefield, who promised that I 
should be credited with these aaaounts in my settlement with 
him as president, but this agreement has never been complied 
with. Just before the gold panic of September, 1869, myself 
with other railroad presidents from North Carolina, to wit: A. 
J. Jones, President of the Western Hailroad, Dr. Win. Sloan,, 
President of the W. C. & P. Railroad, and others formed in 
New York, what in broker's parlance is called a " pool," the 
object of which was to increase the price of N. C. bonds. 
In order to increase the price of the bonds, it was necessary to 
. purchase the bonds, then being offered in the market at low 
figures. We commenced buying the bonds at 50 cents, and by 
la.ige purchases had increased the price to 56 cents, with, as 
we thought, good prospect of running up the price to 75 cents 
as we had arranged to pay promptly the interest on them # 
The sudden and unexpected gold panic came on ; the financial 
disaster, which is a part of the history of the country, bringing 

21 



• ill 



Document No. 11. - ->ion 



ruin upon hundreds of the wealthiest and must reliable hoi 
in New York, depressing many bonds and stocks nearly one- 
half, completely destroying all our plans and bringing very 
heavy losses upon us. In this pool alone my individual losses 
were seventy thousand dollars (£70,000) in cash, in addition 
to which I paid nine thousand dollars ($0,000) as security for 
the loss of Gen. Littlefield, in the same pool. The bonds above 
referred to, as loaned to different parties, were loaned as 
margins to enable them to purchase bonds, thereby placing 
more purchasers in market, the object of which was to appre- 
ciate the price of bonds, thereby enabling the railroad presi- 
dents to dispose of their bonds, for the benefit of their respec- 
tive roads, at a good price. 

GEO. ^Y. SWEPSOS. 



lS71-'72.] Document No. 11. 323 



EXTRACT FROM EXHIBIT K, IN THE WOODFIN 

REPORT. 

I received from the Public Treasurer of North Carolina 6,367 
State bonds of the denomination ot §1,000 each. My bond 
account (A) herewith filed as part of this statement shows that 
5085 of these bonds were disposed of with Messrs. Soutter & 
Co., the National Trust Company, the North Carolina Insu- 
rance Company, Messrs. Hooper, Harris & Co., and Messrs. 
Fels & Co., and my cash amount (B) herewith filed as part of 
this statement shows the amount realized by me on these bonds 
and from all other sources on account of the railroad company. 
M} T bond account shows of the whole number of bonds received 
by me, 1278 are unaccounted for, and I now propose to hand over 
to the'commission 1,27S bonds in place of these bonds unac- 
counted for. I am aware that the bonds are worth less than they 
were selling for at the time I disposed of them, but it is due 
to myself to state that from the disposition of these 1,27S 
bonds I realized but very little money — nothing like as much 

as it will now take to repurchase them. 
******** 

It is due to me and the truth to state that I have paid for, 

and on account of the Western Division of the Western North 

Carolina Railroad Company, the sum of $211,713.11 to secure 

its charter and the appropriations. I paid this amount in full, 

every dollar, and I call the attention of the commission to the 

verified statement of Mr. G. Rosenthal. I have notjasked the 

commission to allow this, though, as I am informed, such^is now 

the custom in the management of railroads, but I propose to 

settle every dollar of that sum also, though I have already paid 

it out, and not charged the company therefor one cent. 

* *:- * * * * * * 



324 



Document No. 11. 



[Session 



EXHIBIT 

OEORGE W. SWEPSOX, LATE PRESIDENT, IX ACCOUNT. WITH THE 



70 



To balance proceeds of sales of bonds 
by Soutter & Co., as per account, 

To cash of Soutter & Co., on loan, 

To cash of II. Clews & Co., per order 
of Gen. M. S. Littlefield, 

To account rendered by Gen. Littlefield 
as expended in Florida, 



To balance due by G. W. Swepeon, 

To 5 per cont. subscription paid on SO 
shares of stock, 



$ 1,502,135 
250,000 

40, 



117,351 



50 



1,909,48720 



lG3,fil2i'7 



40(i 



104,012 1' 7 



1871-'T2.] 



Document No. 11. 



325 



«TP» 



western division of the "western north carolina r. r. co. 

Cr. 



A. 



C. 
D. 

E. 

F. 



G. 

II. 
I. 



By amount expended in Florida by Gen. 
M. S. Littlefield, as per account, 

By amount paid II. Clews & Co., in- 
terest and commission for paying 
Coupons of N. C. Bonds issued to 
Western Division W. N. C. R. R, 

By amount expended for Western Di- 
vision TV. N. C. E. R, 

By amount transferred to my successor 
in offie, 

By 226 Wilmington, Charlotte & Ruth- 
erford Railroad bonds, at 65, 

By interest on same from July 1st, 1869, 
to October 31st, 1S69, 

By investments reported as made unde 
a resolution of the Board ol Directors, 
not yet allowed by the Company, 

By amount expended in the interest of 
the Western Division TV. N. C. R 
R., marked " Disbursement," in sum 
mary statement in Gen. Littleneld's 
account and now credited to Western 
Division TV. N. C. R. R., by debit 
to Florida Railroad Co., 

By amount expended in Florida, 

By extra interest and commissions 
charged by Soutlcr & Co., and taken 
from their account, 

By balance due by G. W. Swepson, 



$ 117,351 

8,100 

268,485 

18,925 

146,900 

6,026 

166,223 



50 



241.713 

726,281 



50 
83 

67 
29 



41 

S9 



35,865 94 
163,612127 



S l,909,4S7|2O 



326 



I)<XTMKXT Xo. 11. 



£ -sion 



EXHIBIT "H." 

INVESTMENTS KEPOBTED AS MADE ONDEB A RESOL1 .:■■'• 01 THE 
BOARD OK DIREOT0R8 NOT FET ALLOWED BT Till: COMPANY. 



1869 

Jan 20 



Julv 2 



100 Florida bonds, 

Int. to Oct. 4. '00 at 7pr.ct. 

Two notes of S. T. Carrow, 
Int. to Oct. 4, '69, at 8 pr. ct, 
40 shares Railroad stock, 
200 shares Bladen Land Co. 

stock, 
$22,000 Florida. Atlantic & 

G. Central bonds 80 

$12,000 Florida Railroad 

bonds. ' v(l 

$15,479 Florida, Atlantic & 

(i. Cent. R. R. coupons 80 
$1,640 Florida, R. R. coup's, 
$1&,415 •• 
$5,425 P. &G. 
Interest on s992,000 P. <fc G. 

bonds from Jan. 1,1869, 

to March 20, 1869, 79 days 

at T per ct., $15,000 80 
Stock in the Deep River 

Manufacturing Company, 



$ 5 5,000 
2,526 



3,540 

72 



09 



in 

37 



$ 57,72 

3,61247 
2,000 

20,000 

18,080 



. 



L2,383 20 
1,3 1 2 
13,132 

4,340 



12,000 
12,037 



$160.--:; 



53 



29 



The above was turned over to Gen. M. S. Littlefield. 
(Signed.) G.ROSENTHAL. 



1871-72.] 



Document No. 11. 



327 



EXHIBIT "L." 



BOND ACCOUNT. 



To Bonds received ot Public 

Treasurer, 
By Bonds sold by Soutter Sz Co., 

as per account rendered, 
By Bonds delivered by Soutter 

& Co., to Attorneys, 



Less Bonds purchased by Soutter 
Sz Co., as per account rendered, 

Net number of Bonds sold by 
Soutter & Co., 

By Bonds with Soutter & Co., 
and turned over to my suc- 
cessor, subject to a loan of 
$250,000. 

By order delivered to my suc- 
cessor on the National Trust 
Company, subject to a loan ot 
§117,3oi.50, 

By order on Home Insurance 
Company delivered to my suc- 
cessor, 

By order on Hooper, Harris & 
Co., N. Y., delivered to my 
successor, 

By order on Fels 6c Co., Balti- 
more, Md., delivered to my 
successor, 

Number of Bonds short, 



!,110 



60 



3,170 



111 



3,02(3 



1,191 



109 
20 
90 
50 



4,520 



569 



6,367 



5,089 



328 Document Xo. 11. [Session 



AFFIDAVIT OF G. W. SWEPSOX. 

NEW YORK SUPREME COURT. 

7%e Western Division of th Western 
North Carolina Railroad Company 

YS. 

1/ney Hopkins et al. 

City and County of New York. 

George \V. Swepson having first been duly sworn maketh 
oath and says : That he was from October, lSb'N t<> October 
1SC9, President of the company, the plaintiff in this action 
and during the period from the spring of 1S09 to the summer 
of 1870, he was the President of the Florida Railroad com- 
pany. Affiant farther states, that as President of the plaintiff 
he came into possession of about six millions <■» bonds of the 
State of North Carolina, said bonds being received by affiant 
tor the agent of said plaintiff, and in payment oi a portion of 
the capital stock of said company. Affiant farther slates that 
lie held said bonds to be used for the purpose of constructing 
the railroad of said plaintiff. Affiant farther that after 

receiving tlie said bonds, he brought them to the city of New 
York and there pledged a large portion or them, that is, nearly 
all of them as collateral security for money, then and after- 
wards borrowed from time to time by this affiant. Affiant 
farther says that he used about $160,000 of said money to 
purchase in Florida a quantity (being more than one halt) of 
the capital stock in the Florida Central Railroad Company, 
which company had then no mortgage debt upon its lines of 
railroad, which Avas sixty miles long completed and in good 
running order. Affiant farther says that other portions of said 
money, to-wit : about (720,000 were expended in buying first 
mortgage bonds of the Pensacola and Georgia Railroad Com- 
pany and of the Tallahassee Railroad Company, said mort- 
gage bonds, amounting to about $1,000,0(>0, and also in buying 



1871-72.] Document Kg. 11. 329 

some stock in said company, and in paying expenses incident 
to such purchases. Affiant farther says he purchased and 
held said railroad interest above named in his own name. 
Affiant farther says, about the month of March, 1869, the 
Trustees of the Internal Improvement fund of the State of 
Florida, having authority to do so, caused to be sold at public 
sale the Tallahasse Railroad and the Pensacola and Georgia 
Railroad to pay the first mortgage bonds thereof. Affiant 
further says that Mr. F. Dibble, cf Jacksonville, and associates 
became the purchasers of both of said roads at said sale, they 
having bid lhe amount of the whole mortgage indebtedness 
of both of the railroads, amounting to over $1,400,000.. Af- 
fiant farther says, that said F. Dibble and associates were 
not able to pay the said Trustees the amount of said bid, the 
large portion of which would have been due to the affiant, 
and thereupon said Dibble and his associates proposed to this 
affiant, that if this affiant would relinquish his claim to pay- 
ment under said sale, they would cause a new company to be 
organized to own both of said railroads (sold as aforesaid) 
and that this affiant should be associated therein, and should 
own one third of the capital stock of the new company, and 
further that a new mortgage should be made on the new con- 
solidated railroad, and the bonds thereof should be sold lor 
one purpose only, to-wit : to pay this affiant the entire amount 
of his investment and outlay in purchasing said raidroad 
interest, and a further sum of $150,000 and also to pay 
to said Trustees of said Internal Improvement fund the 
amount of the remaining outstanding; bonds for which 
said railroad was sold, said remaining bonds amounting 
to over $400,000. Affiant says that he agreed to said proposi- 
tion, and a written memorandum of said agreement was duly 
executed by said Dibble and his associates and this affiant* 
And this affiant surrendered his bonds to said Trustees of said 
Internal Improvement fund. Affiant farther says that said 
written agreement was drafted by M. D. Papa, Esq., and J. P. 
Sanderson, Esq., Attorneys &c, in Florida, and said agree- 



330 Document No. 11. [Session 

ment was transferred by this affiant to General Milton S. Lit- 
tlefiekl after he became President of the Western Division oftlie 
Western X. C. Railroad Company. Affiant further says, that 
subsequently, a supplemental agreement was made by him 
with said F. Dibble and a majority ot his associates, whereby 
the latter agreed, that in consideration of the payment of 
$25, which was duly paid) by affiant, lie should receive 

60 per cent, of the capital stock of said consolidated company 
instead of one-third thereof, as originally agreed. Affiant farther 

- that the part of said money expended as above mentioned 
for said railroad company was about $7,000 for two loconiotri 
and the purchase money for a lot of land in Jacksonville, said 
lot having cost the sum of $5,000. Affiantffarther says that he 
assigned and transferred said agreement with F. Dibble and 
associates, and all affiants interest, in and claims upon said 
Florida Railroads to said Milton S. Littlefield, he being the 
president of the Western North Carolina Railroad Company : 
and said assignment was so made upon the express understand- 
ing and agreement, that he would apply said property to reim- 
burse to said railroad company, the full amount (with eight per 
cent, interest I oi all their money which affiant has invested and 
expended as aforestated in said Florida Railroads. Affiant 
farther states that out ot the sum of $720,000 invested as above 
stated in said Florida Railroads, about $120,000 was so expend- 
ed lor affiant through the agency of M.S. Littlefield in person. 
(Signed,) GEO. W. SWEPSON. 

Subscribed and sworn to before me this 8th, Sept. 1S71. 

JAMES CONNALLY, 
Notary Public, New York City. 



1871-72.] Document No. 11. 331 

WESTERN NORTH CAROLINA RAILROAD, 

Western Division, 
Office of Chief Engineer, 
Asheville N. C. June 12th, 1869. 

Memorandum of an agreement between James C. Turner, 
Chief Engineer, Western Division, W. N. C. R. R., of the 
first part, and Draine & McDowell ot the city of Wilmington 
and State of North Carolina of the second part witnesseth : 
that the said party of the second part agrees to contract for and 
complete the graduation, masonry, bridges, superstructure &c, 
ready for the iron of the forty-five miles of the French Broad 
Branch and of the fifty miles including the Cowee Tunnell of 
the main line of the W. Div. W. N. C. R. R., for the follow- 
ing sum per mile to wit: for the French Broad Branch of 
forty-five miles $20,199.14 per mile, and for the fifty miles as 
designated in the main line s56.475.00 per mile as per tabular 
statements of the quantities and prices herewith submitted and 
which shall be made to accompany and be a part of this con- 
tract, subject however, to such changes as may be necessary in 
the estimation of the Chief Engineer, and, upon the final com- 
pletion of the work, should the estimated quantities of material 
be increased or diminished or different from that now estima- 
ted, the price shall be regulated accordingly, and further, should 
there be work required to be done, not now provided for in the 
estimates it shall be paid for at the estimate of the Chief En- 
gineer for the same. 

This agreement is further intended to provide for a uniform 
price for the excavation of earth, subject however to the regu- 
lations in regard to haul, for the forty-five miles of the French 
Broad Branch and the fifty miles ot the main line, this price 
to be 24 cts. per cubic yard, and lor excavation of solid rock 
on the French Broad Branch §150 per cubic yard, and it is 
further agreed that there shall be added to the estimate ot 
bridge superstructure $20 per lineal foot on the French Broad 
Branch. To the total sum of these estimates there shall be ad- 



o32 Document No. 11. [Session 

ded $1,000 per mile for engineering and general superintend 
dance, and to this sum there shall ako be addded ! (| per cent., 
for stock in the railroad company and finally, to the snmabove 

named there shall be again added 50 per ecu!, of the whole 
amount for contingencies. 

In fulfiillment ol this contract and alter its completion, the 
party of the first part agree to pay to the party of the second 
part one third (■£) of its estimated cost in the stock of the com- 
pany, but during the progress of the work the Chief Engineer 
shall cause to be made a monthly estimate oi the work done 
and four-fifths of the remaing two-thirds (■$) shall be paid to 
the party of the second part in current funds. 

And it is further agreed that under this contract the Chief 
Engineer shall have the right to re-let at pleasure any work he 
may desire to such parties as may be able to him, pro- 

vided the same shall be let for a sum nol exceeding the cash 
payment of this agreement. The essence of this agreement is 
that the work shall be done in all respects in dance with 

the printed specifications. 

The above is the substance of a contract, agreed upon by the 
parties above mentioned, to be offically consummated upon the 
approval of the President of the W. D. W. X. 0. R. \l. 
Signed. JAMES C. TUENER, 

Chief Engineer, W. D. W. N. G. /.'. R. 

drain & Mcdowell. 

( 'ontractors. 



1871-72.] Document, No. 11. 333 

SUMMAKY OF ESTIMATE. 

French Broad Branch. 

Graduation, Masonry and Bridge superstruc- 
ture, $ 669,522.01 

Add for Engineers and General Superinten- 
dent 45 miles at $1,000, 15,000.00 



$ 714,522.01 
Add 50 per cent, for stock in Railroad Co., 357,261.00 

1,071,783.01 
Add ten per cent, for Contingencies, 107,178,30 

Total cost Graduation, Masonry and Bridge 

Superstructure, $ 1,178,961.31 

Which amount divided by 45 (length of road 

in miles) makes the cost of construction 

ready for ties and Iron, 26,199.14 

Western Line. 

Graduation, Masonry, Bridge Superstructure, 

Tunelling &c, $ 1,855,927.51 

Add for Engineering and General Superin- 
tending, 55 miles at $1,000, 55,000.00 



$ 1,910,927.51 
Add 50 per cent, for stock in Railroad Co., 955,463.75 



• % 2,866,391.26 
Add ten per cent, for contingencies, 286,639.12 



Total cost ot Graduation, Masonry, Bridge 

Superstructure, Tuneling, &c, $ 3,153,030.38 

Which amount divided by 55 (the length of 

road in miles) makes the cost per mile, 57,327. S2 

A true copy : 

J. G. MARTIN, 

Cu//t//t>'nsiir/icr. 



334 Document No. 11. [Session 

New Yoek, August 15tli„ 1869. 

Kaj. J. C. Tukneb, Esq. ; 

Dear Sir :— I learn from Mr. John A. Hunt that he will 
be through with his work cast of the Ridge in oiffht or ten 
• lays, so as to enable him to put a portion of his force to work 
west. I have told him that he shall have work on the French 
Broad. 

I therefore wish yon to put Mr. Hunts force to work on the 
very best portion of the French Broad Branch su 7, as will 
sail him and when I get to Asheville we will arrange with 
Mr. Hunt as to the terms, amount of work, Arc., &c. 
Yours truly, 

GEORGE W. SWEPSON, 
A true copy: President. 

J. G. MARTIN, 

Commissioru r. 



. ■ \ . j 
(confidential.) 

MJUOB J. C. TlTBNEE— 

Dear Sir: I want you to manage and not allow the work to 
progress too fast along the line, for the reason that bonds are 
now so low that to force any amount on the market will break 
down the price to 40 cents, or below. This being the case, 
we must not sell bonds too last, and consequently the work 
must, tor the present, not be pressed forward. 
(Signed) Very truly, 

" GEORGE W. SWEPSON. 



June 3<»th, 1SC9. 
A true copy : 



J. G. MARTIN, 
( bmmis8ion< r 



1871-72.] Document No. 11. 335 

WESTERN NORTH CAROLINA RAILROAD, 

Western Division, 
Secretary and Treasurer's Office, 
Asheville, N. C, Sept. 19th, 1871. 

"Mesol/oed. That in order that the work may be let out on 
terms the most advantageous to the company, and public, the 
Chief Engineer be instructed to examine carefully and report 
on the bids offered, together with his estimates, ot each section 
ot the work." 

I certify that the above resolution is a true copy from the 
proceedings as appears upon the records of this office. 

G. W. ROBERTS, 

Secretary and Treasurer W. D. W. N. C. R. R. Co. 

On motion of Gen. T. L. Clingman, it was resolved that 
the President and Chief Engineer be and they are hereby 
authorized* to let out by contract the whole of the road forth- 
with upon condition, nevertheless, that the right is reserved 
to relet the whole or any part of the said work at any time 
hereafter that they may see fit. 

I certify that the above resolution is a true copy of such as 
appears on the books of this company, passed at a meeting of 
the Board of Directors, Morganton, N. C, October 15th, 1868. 

G. W. ROBERTS, 
Secretary and Treasurer W. D. W. N. C. R. R. Co. 



Document No. 11. [Session 



COMMISSION FOE PROXIES FROM GOV. HOLDEN. 



STATE OF NORTH CAROLINA. 

Executive DEr-Ain.MENT, 
Raleigh, October G, 1869. 

My Peak Mb. Swepson : 

Enclosed please find commissions for three proxies. I trust 
they will be acceptable. 

Your dispatch was received. I regret that all our friends 
would not act in concert, but I hope the result will not be 
permanently injurious. 

I have great confidence in your judgment. It is important 
to manage your road so as to please the dominant party in the 
West, doing injustic to no one. A. II. Jones and Mr. Gaha- 
gan are good judges in this matter. 

My regards to friends. 

Hoping to see you soon, 

I am truly your friend, 
[Signed,] W. W. HOLDEN. 

I certify that the foregoing is an exact copy from the 
original. 

G. ROSENTHAL. 
Sept. 23d, 1871. 

(Copy filed with the deposition of T. L. Clingman.) 

This agreement between George W. Swepson and T. L. 
Clingman witnesseth, That whereas Oreo. W. Swepson has 
acquired certain inten stain three railroads in Florida, known 

as the Florida Central, Pensacola & Georgia and the Talla- 
haase i Railroads, now in consideration of the aid rendered by 



187i-'72.] Document No. 11. 337 

the said T. L. Clingman in securing said interests and in con- 
sideration of one dollar paid, the said Geo. W. Swepson agrees 
that he will convey to the said T. L. Clingman ten per cent, 
of the interest he holds in said roads, whether in the shape of 
bonds or stock, or money realized thereupon. It is under- 
stood that the said Swepson is to retain a sum equal to his 
expenditures in securing said property, and that T. L. Cling- 
man is to share in the net profits as above stated only after 
the said Swepson has been reimbursed for all his expenditures 
of every kind, including interests, commissions and attorneys' 
fees. In testimony whereof he has S3t his hand and seal this 
the 5th day of April, 1869. 

(Signed) G. W. SWEPSON. [l. s.] 

Witness : G. Bosenthal. 



22 



338 



Document No. 11. 



[Session 



LIST OF THE STOCKHOLDERS 

Of the Western Division of ilu Western North Carolina Rail 
Road, a* told nfrom the Stock Boole of said Company. 



rr: 




SIIAKl -. 


DOLLARS. 


1 


George W. Swepson, 


5 


500 




George W. Gahagan, 


5 


500 


3 


George "W. Dickey, 


5 




4 


Col. A. T. Davidson, 


5 


500 


5 


Genl. T. L. Clingman, 


5 


. 


6 


Mai. W. W. Rollins, ' 


5 




7 


Maj. W. W. Rollins, for W. D. W. 






8 


N. O.K. R, Co., Littlefield'B stoclr. 


10,790 


1,097,900 


9 


Hon. J. C.Abbott, 


5 


500 


10 


A. IL Jones, 


:. 


500 


11 


G. M. Roberts, 


5 


500 


12 


J. R. Amnions, 


5 


500 


13 


Genl. R.M. Henry. 


1,460 


146,000 


11 


Hun. -Tames H . Merrimon. 


5 


: 


L5 


James II. Rumbangh, 


i 




L6 


Capt.W. J. Fagg, 




L00 


17 


L. 11. Smith, 




100 


18 


I, M. Welch, 


1 


100 


1!' 


W. A. Smith. 




10<> 


20 


J. G. Colgrove, 




100 


21 


J. A. ( Jampbell, 




LOO 


22 


Ashley Mull, 




L00 


23 


Dr. Christopher Happoldt, 




[Q | 


24 


J. W. 1 Jerry, 




L00 


25 


Allen Berry. 




100 


20 


Dr. W. A. Collet, 




li: | 


27 


1.. M. I mckworth, 




LOO 


28 


1). 1!. Mauney, 




100 


29 


James J. Beach, 




LOO 


30 


Thomas A. Scales, 




L00 




Jamee W. Smith, 


1 


L00 


32 


R.W. Brittain, 




L00 


33 


Jeremiah Smith, 


l 


xoo 




s. E. Poteat, 




100 




Ephraim Able, 


1 


LOO 



1871-72.] 



Document Ko. 11. 



339 



LIST OF STOCKHOLDERS— {Cant in ned.) 



36 Nicholas Hoffman, 

37 William Roper, 
3S Joseph Benrield, 
39 C. E. Browning, 
40 ! Joel Cloud, 

41 Thomas Feill, 

42 F. C. Erwin, 

43 J. T. Patterson, 

44 L. A. Taylor, 

45 Capt. A. M. Alexander, (Littlefield's 

46 stock,) 

47 Theodore F. Davidson, (Littlefield's 

48 stock.) 

49 Rankin and Pnlliam, (Littlefield's 

50 stock,) 

51 W. P. Dunivant, (Littlefield's stock,) 
[ [out Patton, (Littlefield's stock,) 

53 Hugh Reynolds, 

54 Samuel McD. Tate, 1,208 

55 Hon. Z. B. Yance, 

56 R. F. Simonton, 

57 Hon. A. S. Merrimon, 

58 Hon. James D. Henry, (Littlefield's 

59 stock, 

60 George Gr. Sanborn, (Littlefield's 

61 stock) 

. Pinkney Rollins, (Littlefield's stock) 

63 V. S. Lusk, (Littlefield's stock,); 

64 Charles IT. Sowers, (Littlefield's st'k) 

65 Messrs. A. T. Davidson and W. W. 
G6 l Rollins, 
G7;W. C. B. Garrett, 
68 Hon. X. W. Woodfin, 
69| stock,) 



SHAKES. 



i Littlefield's 

(executor of 



ft) Hon. N. W. Woodfin, 

71 1 J. W. Woodfin'a stock,') 

72 Hon. N. W. Woodfin, (executor of J 

7:: W. Patton's stock,) 



DOLLARS. 



47 
1 

115 

1,000 
5 
5 
5 
5 

9 

1 

5 
5 
5 



9,253 

5 



11 

4 

38 



100 
100 
100 
100 
100 
100 
100 
100 
100 

500 

100 



*,< 



00 

100 
11,500 
100,000 
500 
500 
500 
500 

900 

100 
500 
500 
500 

925,300 
100,000 

1,100 

400 



3,800 



340 



Document 2so. 11. 



[Session 



LIST OF STOCKHOLDERS— {Continued.) 







SnARES. 

1 


DOLLAK-. 


74 


Capt. C. M. McCloud, 


100 


75 


A. B. Chunn, 


9 


900 


76 


Summer McDowell cv; Co., 


12 


1,200 


77 


Miss Charlotte Kerr, 


2 


200 


78 


A. T. Summey, 


- 


700 


79 


Alexander 11. Burnett, administra- 




900 


80 


tor of J. M. Alexander, 


9 




81 


Smith cV- Baird, 


2 


200 


82 


John C. McDowell, 


12 


1,200 


83 


W. W. McDowell, executor of J. M. 




100 


84 


Smith, 


1 


100 


85 


Jesse R. S. Gilland, 


1 




85 


C. K. Garrett, 


1 


100 


86 


J;imes L. McKee, 


2 


200 


87 


John Rutherford, 


12 


1,200 


89 


W. W. McDowell, 


1 


100 


90 


Joseph Keener, 


5 


500 


91 


A. L. Ilarren, 


5 


500 


92 


Littletield's original stock, 2,000 










93 


!Next subscription, 11,334 


23,126 


$ 2.312,600 


94 


Transfer to by R. R. Swcpson. 5,961 






95 


Transferred hall of Henry & 






96 


Swepson, 1,4G0 






97 




20,755 








98 


Transferred by Littlefield to 






99 


J. L. Henry, 10 






100 


Transierredby Littlefield to 






101 


J. L. Henry, 11,000 






102 


Transferred by Littlefield to 






103 


Davidson & Rollins, 9,745 






104 




20,755 





I certify that the above is a true exhibit, according to the 
Stock Book of this Company, September 17, 1881. 

G. M. ROBERTS, Se •. and Treat., 
W. 1>. W. N. C. R. B. Co. 



1871-'72.] Document No. 11. 341 



WESTERN NORTH CAROLINA EAILROAD, 

Eastern Division. 
Raleigh, Sept. 13th, 1871. 

Col. S. McD. Tate appeared, was sworn, and testified : 

Q. What position did you hold, and do you now occupy, in 
the Eastern Division of the W. N. C. K. R. Co. ? 

A. I wa3 formerly President up to the administration of Dr. 
Mott. By a resolution of the company, passed shortly before 
Dr. Mott came in, I was made trustee of certain bonds issued 
or the construction of the road. At the time Mott came in, If 
was made financial agent of the company, and as such finan- 
cial agent, there came into my hands the State bonds issued 
on account of the company, the number of which have been 
stated in my testimony before the Bragg committee, wherein 
I have accounted fully for all of them, and refer the Commis- 
sion to my testimony in that report for a full explanation of 
my management of these funds. The office of financial agent 
was abolished in 18G9, at which time I made a report, as 
financial agent, of my official acts.* At my request a com- 
mittee was appointed, to-wit, N. W. Woodfin and J. L. Henry, 
to investigate my accounts and official conduct. They made 
a written report, after visiting New York, in which every 
thing was stated to have been found correct, and no evidence 
of unfaithfulness or improper official conduct on my part. 

Q. What connection did you have with Geo. W. Swepson 
or others in the speculation in North Carolina bonds in New 
York city in the summer of 1S69 ? If any, give the commis- 
sion all the information you have on the subject. 

A. I was interested as a partner in the firm of T. W. 
Dewey & Co., which was composed of T. W. Dewey, G. W. 
Swepson and myself. Mr. Dewey had bought some bonds in 



*This report has been printed, and is filed among the papers of the 
company, and will be furnished by Col. Tate. 



842 Docuhbnt No. 11. [Sessi 

New York, which were placed in the hands of Howes & M . 
When I got to New York, Mr. Dewey told me of this trail 
tion, and mentioned who were associated with him in the pur- 
chase; my recollection is that it was Mr. McAden, and per- 
haps Mr. Swepson. Mr. Dewey told me that he was going 
home, and that he would leave me to take charge of his inter- 
ests. Some days afterwards the bonds having advanced to 51 
cents or thereabouts, I went to Howes cV Macy, and instructed 
them to sell Dewey's bonds and notify him by telegraph, leav- 
ing for home myself the same evening, I think. About 
the 6th of September afterwards, I returned to Nov/ York for 
the purpose of settling up my business. "When I reached 
there I found to my surprise an order from Mr. Dewey to pur- 
chase 300 bonds. 250 odd had been bought when I counter- 
manded the order. I was afterwards notified that this order 
had been intended for Dewey & Co., R Y. McAden and my- 
self. These bonds were subsequently sold at a loss. I do not 
think Mr. Swepson had any interest in this transaction, except 
as a partner of Dewey & Co. On the 6th of September. I 
think it was, with a view of showing those Xorth Carolini. 
that I felt anxious to see the price of the bonds sustained, I 
agreed to buy a lot sold on that day, such as were offered at 
the public board of brokers. I gave the order and got 165, of 
which A. J. Jones was to have taken 55, and J. J. Mott 
and the other 55 more. All this is explained in my testimony 
before the Brass Committee. I was likewise interested in the 
purchase with Mr. Swepson of a number of bonds from Judge 
Fowle on the eve of his leaving New York. I think there 
were about 100, for which we gave about 50 cents in the dol- 
lar. 1 cannot state accurately the number of bonds or the 
prices without reference to the brokers books in New York. 
I think these arc all the bond transactions in New York in 
IS*','.'. 

A. In these transactions to which you have alluded, didyOU 
use any of the bonds or funds of the Western North Carolina 
Railroad, or was it an individual matter '. 



1871-' 72.] Document No. 11. 343 

A. It was purely an individual matter, as I have stated in 
my examination before the Bragg Committe. I did not use 
an} T of the funds of the company. 

Q. Do you know of Swepson putting up margins for various 
individuals at the time ol these transactions spoken of ? 

A. He never put up- any for me, though it was the common 
report that he aided many others. I know nothing of my own 
knowledge. 

Q. Do you know, or have you any information of what dis- 
position A. J. Jones made of the bonds in his possession, out- 
side of the speculations referred to '. 

A. In Now York there was an association established by the 
business men of the city for the suppression of gambling. A 
man claiming to represent that association, came into the office 
of Soutter & Co., and asked how he could communicate with 
the proper parties of Mr. Jones' operations. On my being 
questioned, I suggested that the treasurer of the company be 
notified by mail. I inferred that Jones was gambling heavily, 
and using the funds of his road. Shortly after that the trea- 
surer of the Western Railroad, J. II. Davis, came on to New 
York, (at least I saw him very soon after my advice to commu- 
nicate with him.) I learned that he had a conferrence with 
Jones of which I know nothing of my own knowledge. 

Q. Please state your connection with Mr. Swepson in the 
purchase of North Carolina Railroad bonds in the month of 
November, 18G8 ? What you gave for them, and all other in- 
formation connected with the parchase I 

A. While in New York about that time, I saw an advertise- 
ment in the North Carolina papers of the sale of ISO North 
Carolina Railroad bonds, by the treasurer of the state. I called 
Mr. Swepson's attention to the notice, and remarked that they 
were good bonds, and I desired to buy them, or a portion of 
them, for our railroad company. He agreed with me in the 
opinion I expressed of their value, and said that he wanted 
them too. We agreed that we would buy them if we could. 
Mr. Swepson did buythe bonds, or 170 of them, at 05 cents, 



344: Document No. 11. [Session 

hut when lie came to let me have some of them, to-wit, 53 
honds, I had to pay him $3G,S93.30, which was G9 C-l on the 
dollar. And on the Sth of March following, I got 1G more for 
$12,800, which was SO cents on the dollar, with the interest 
on. These bonds were bought with the funds of the Western 
North Carolina Railroad Company, and were sold on its account 
for a profit ol some $8,000. I received no benefit by the trans- 
action, directly or indirectly, nor was there ever any under- 
standing that I should. I know nothing about the trade or 
understanding between the treasurer and Swepson. Dr. 
Hawkins was present when I got the bonds of Swepson. I 
accounted for these bonds in a statement which I made to the 
Bragg committee, and which is published. 

Q. In the account filed by Mr. Swepson as a part ot his testi- 
mony, there is an item charged against M. S. Littlcfield, dated 
November 18th, 1SGS, of $14,000, as money In wrowed of your- 
self for the benefit of M. S. Littlcfield, please explain the trans- 
action. 

A. In my statement made to the stockholders and to the 
Bragg committee, which is a transcript ot my book, it will be 
seen that I lent to G. TY\ Swepson, President, $25,000 in 
December, 1868. That is the only loan made to him, and I 
presume in this memorandum he makes this charge as an 
explanation to Littlefield. This money was loaned by me as 
agent of the "W. N. C. R. R., and was all paid back by Swep- 
son except $11,000, which I have explained in my examina- 
tion before the Bragg committee. I know nothing of any 
arrangement between Swepson and Littlefield by which this 
charge was made. I took Swepson's note for the amount 
loaned, holding him individually responsible, though Little- 
field was about at the time, and I suspected that he had some 
of the benefit of the loan ; in fact, I know he got $5,000 of it. 

Q. Was the inducement to this loan in consideration of any 
services rendered or to be rendered by Littlefield or Swepson 
to procure the passage of any bill making appropriations to 



railroad purposes through the Legislature ? 



1871-72.] Document No. 11. 345 

A. It was not in consideration of any services rendered or 
to be rendered to procure the passage of any bill before the 
Legislature. At the same time, Mr. Swepson and Littlefield 
had great influence over the Legislature, and Swepson rather 
threatened me if, I did not lend him the money. Under this 
influence, and believing he was perfectly solvent, I loaned 
him the money as above stated. I will also state in addition, 
that we were anxious to advanca the interest of the Western 
division of the road, and I thought this loan would have some 
influence in effecting that object in connection with Swepson's 
efforts- 

Q. "Will you state all you know of the organization of the 
Western Division of the W. X. C. R. R., and the receipt of 
State bonds from the Treasurer, by G. W. Swepson \ 

A. I was present at Morganton when the Company was 
reported as organized. I remember that Mr. Reynolds ten- 
dered a subscription of, I think, $100,000, and with his note at 
60 or 00 days for the 5 per cent, on the subscription. I do not 
recollect particularly as to any other subscription, but I believe 
they reported $300,000 of stock subscribed, and declared the 
meeting organized. They adopted by-laws, elected Directors, 
and G. W. Swepson was made President. I do not know 
upon what certificate Mr. Swepson got the 84,000,000 from the 
State Treasurer. 

Q. Do you know anything about the subscriptions alleged 
to have been made by Littlefield, at Raleigh, of $1,000,000, 
and Gen. Henry of $400,000, and of yourself of $500,000. 

A. I remember that I agreed in the interest of the people 
along the French Broad line to guarantee or conditionally 
subscribe for the stock on that line with the understanding 
that solvent contractors were to take the stock and were to 
have the contract to work it out. I do not remember the 
amount, but presume it was at the engineer's estimate. I 
was not really a subscriber, as I understood it, nor did I ever 
pay, or was I called upon to pay the 5 per cent. I signed 
the paper simply guaranteeing the subscription on the part of 



346 Document No. 11. [Session 

the stockholders, the precise contents of which I do nut 
remember. I know nothing of the subscription of $400,000 
by Gen. Hen. Henry, and have only heard that Littleheld had 
subscribed $1,000,000. I know the fact that by general rep- 
utation Gen. Henry was and is insolvent. 

Q. After this alleged subscription was the road let to con- 
tract, and did you take a contract from Asheville to Paint 
Rock, or any ether part of it? 

A. I can't remember the precise nature of this paper I 
signed. It was understood by me to be a matter of form, and 
to expedite the' opening of the work. 1 presume if the paper 
was in the nature of a subscription that it was expressed in 
that paper that it was to be discharged in this work. 



Thuksda"s Morning, Sept. 14 th, L871. 

Examination i : Col. Tate resumed. 

Cub Tate desiring to answer the last question more fully 
makes the following additional statement. 

"Our Company was specially interested in getting an early 
connection with the Tennessee road, and looked to the short 
cheap line down to French Broad as the iirst to be realized. 
After tin' meeting in which certain subscriptions Mere rejected 

because of failure to pay an advanced instalment and alleg 
insolvency, I told Mr. Swepson I would insure good subscrip- 
tions on the blench Broad part, lie presented me a paper 
writing to subscribe, the contents of which 1 cannot fully re- 
collect, but the purport of it was that I would guarantee, or 
conditionally subscribe the requisite stock for the French broad 
branch upon the understanding that it was to be worked out by 

solvent person.- along the line or elsewhere, and the work equi- 
tably awarded among them. I had a knowledge of former 
surveys and estimates of this line, and was able to fix a sum for 
which I would have undertaken to get it contracted for, but I 



1871-72.] Document No. 11. 347 

do not remember whether the sum was lixed in the paper re- 
ferred to. There must have been some limitation to my under- 
taking, else I could not have signed it. There was no purpose 
on my part except to encourage the early construction of this 
French Broad Branch. I was not called upon to pay instal- 
ment, and did not. I never exercised any control in the stock 
of this company, nor had any connection with it afterwards. 
I learned that the stock had been taken, and the contracts 
awarded to various persons on this line, and gave the matter 
no further thought. It appears from a report of the presi- 
dent, made soon alter this, that I was not recognized as a stock- 
holder, and I never considered myself such except for the time 
being a conditional one, as described. I had no interest in the 
contracts, nor have I ever received any benefits oi any kind 
Irom that company. 

Q. What disposition has been made of the 316 State bonds, 
which were left with the Bank of the Republic, in New York, 
as collateral security for the sum of $-15,727.00 1 II sold, when 
and at what prices '. 

A. They were sold and reported by me to ray company, a 
copy of which report have on tile, which I will place in the 
hands of the Commission, which shows the amount of sales 
and their disposition and proper application. I will add in 
further explanation of mv testimony in regard to the 55 bonds 
taken by Mott, I forgot to state before the Brairg Committee 
that Dr. Mott was responsible for 55 bonds bought, but they 
were re-sold very soon after the purchase at a loss to, which I 
have charged in an account against him. 

Q. Give what information you have of the contracts with 
John Malone & Co., who were the partners in that concern, 
and whether you or any other officer of the company had or 
now had any interest in said contract? 

A. In 1800 a contract was entered into between the board 
of directors of the W. N. C. R. R., and Crockford, Malone 6z 
Co. for the construction of the road ami completion of the 
same from station 1770. near Old Fort, through the Blue Ridge 



34S Document No. 11. [Session 

mountains to the western portal of the Swannanoa tunnel, 

a distance of about ten miles, and including the furnishing of 
the iron and other material, right of way, Arc, for a specific 
sum, being the exact amount estimated by the engineers, as 
the cost of the same. They were engaged upon the work 
and continued until stopped by the company on acccunt of 
the war. After the war, the directors bcimr anxious to re- 
sume work, took the matter into consideration, and directed 
that the prices on all work, estimated before the war, be 
increased 50 per cent, to conform to the changed currency 
and cost of supplies, eve, and I being president, was in- 
structed to re-let all work from Morganton, west, upon that 
basis, giving preference to old contractors, who were re- 
sponsible, in as far as they desired to renew their contracts. 
This was done under the supervision <>t' the Board of Directors 
at Statesville. I believe, except in the case of John Malone & 
Co., of the mountain work, which was delayed till some later 
day. At a subsequent meeting of the Board of Directors, a 
resolution was passed, introduced by Mr. G. F. Davidson, I 
think, authorizing me to relet the mountain work upon the 
same terms, as the original, adding tiie increase, and deducting 
the work previously done. My information was that Col. 
Orockford, John Malone, a Mr. Groldsboro' and James W. "Wil- 
son composed the firm of John Malone & Co. 1 got this infor- 
mation from the parties themselves, except Mr. Goldsboro', with 
whom I am not acquainted. I have information that Col 
Crockford has since died, and Maj. Wilson told mo that the 
ler partners settled with the representatives of his estate. I 
know of no officer or other person being connected in anyway 
in this contract. I have never had, myself, the slightest inter- 
est in that or any other contract lor building the road since be- 
ing an officer of the road. 
Q. Who was the ( Ibief Engineer when the prices were raised i 
A. Jas. W. Wilson was Chief Engineer when I came into 
the Presidency. Oapt, Sarah Kirkland has been Chief Engin- 
eer under ihe administration of President Caldwell. "When 



1871-'72.] Document No. 11. 349 

the first work was done after the war the prices were raised 
about the same. 

Q. Did the Board of Directors, under your administration 
make their changes in the estimates by the advice and recom- 
mendation ot the Chief Engineer, Jas. W. Wilson; or did he 
have anything to do with it to your knowledge ? 

A. I do not know whether or not he was present or whether 
he was consulted. 

Q. Do you know anything ot the work done by John Ma- 
lone & Co., in the mountain section, and whether there were 
any changes made in the original location of the road, and if 
such changes were made, did they enure to the advantage of 
the road or that of the contractor? And state further, whether 
the raised estimates are based upon the aggregate cost of the 
road, or upon itemized estimates \ 

A. My understanding is that the Engineer surveyed and 
measured the line and made calculations of the probable cost 
of doing each particular piece of work, that these items being 
all added together, with an estimated allowance for contingen- 
cies, such as accidents or slides, &c, made the sum which it is 
said would be the cost of constructing the road. The Engineer 
made this report to the Board of Directors. The contractors 
made a proposition to do all this for that sum, which proposition 
waa accepted and the contract entered into or executed in 1860. 
In renewing the contract the additional 50 per cent, was calcu- 
lated upon what appeared remaining to be done, which was 
found by deducting the amount estimated as done, under the 
old contract from this aira'rcirate sum. I will furnish the com- 
mission with a copy of this contract. I have understood that 
originally the line adopted was thought to be dangerous, if not 
impracticable, and that in reviewing, the engineer found abet- 
ter location and changed the line to it, at one point throwing 
out these bridges and substituting solid embankments in their 
place Whether this would have reduced the cost of the line, 
would depend upon the character of the material of which the 
banks were to be made — the quantities being considerably in- 



350 Document X<>. 11. [Session 

creased. That was my understanding from the Engineer since 
the change, which I am told, was determined upon l«v }Ir 

Turner betorc the war The development of the work lias dis- 
closed the fact that the material being more favorable than any 
one could reasonably have expected in the mountains, this 
change would make a much cheaper line, and this changed line 
is in grades lighter and generally safer, and more permanent, 
though longer. The original contractors, Crockford, Malone 
& Co., did work previous to the war. They received some 
payments during the war in Confederate money. I have never 
made any final settlement with them on account of that work. 

Q. Has there been any .settlement with the new firm of 
John Malone & Co., and if so, how much have you paid them, 
and how much is still due them ? 

A. I have made no settlement with them. We have made 
payments; to them on account, the amount of which I do not 
remember. Dr. Mott gave them notes to the amount <>f 
$175,000 on account of the worktheyhad done. J gave them 
33 mortgage bonds, which were to be credited on the amount 
due them. By this payment T did not intend to 
disclaim the note, given by Dr. Mott. The whole matter 
tween John Malone A: Co., and the company, is still unsettled. 
There has been no formal action by the board oi directors upon 
this matter, since I have been president. I mean to say. by the 
present board of directors. 

Q. Were you financial agent at the time the read and 
property was mortgaged by the company to secure the bonds 

lied by said company ? [f so, will you give the commission 
such information as you have on the subject, and will youstatc 
the present indebtedness ot the company as near as you can '. 

A. I was not financial agent of the company at the time the 
mortgage was made, the company having abolished thai oflB 
the summer before. The mortgage was made in March, l s 7". 
by order of the board of directors. It was prepared by N. W. 
Woodfin who w;.s acting as counsel for the company in \\\\>. 
matter. The mortgage was ordered to be made by the board 



1871-72.] Document No. 11. 351 

of directors. It was considered necessary in order to raise 
funds to complete the road. The loan was negotiated, as I 
understand at a rate ot interest, equal to 17 per cent, per 
annum, which I think was the regular rate in New York on 
such securities as were offered. I have not been able to do 
better since. Dr. Mott had been authorized by the Board of 
directors to sell bonds at 75 cents, and I do not believe he 
could have sold any in New York at such prices. He hypothe- 
cated bonds at about an average of 40 cents, as I understand ? 
or thereabout. I understand the indebtedness of the company 
to be, exclusive of the claim of "Wilson ctMalone about §50,000, 
which amount is now pressing on the company. The hypothe- 
cation of the bonds partially executed, I did not sec the 
necessity for it, but Dr. Mott says, he did it of his own motion, 
with the view of giving increased confidence to the creditors 
from whom he was borrowing. 

Q. Do you know airy farther facts connected with the bond 
transactions in New York not stated in your testimony before 
the Bragg Committee, or in the former part of your examina- 
tion before this commission? If so, please state it fully '. 

A. My recollection is that I have stated every thing fully 
that. 1 know. 

Q. Have you any knowledge or information of any money, 
bonds, proceeds of bonds, or any thing of value having been 
paid or offered to any member of the legislature, or any state 
official, or officer of any railroad company, to influence their 
action in procuring the passage of any bill making appropria- 
tions to railroad purposes, or for other purposes ? 

A. I have no such knowledge or information, except general 
rumor. 

Q. Did Mr. Eliason, while engineer of the road, make any 
proposition through you to Mr. Wilson to increase the estimates 
of his contract for $200,000 of mortgage bonds to be placed 
with him (Eliason) ? 

A. During the year 1870 I had frequent conversations with 
Col. Eliason, chief engineer, with regard to the prospects of 



352 Document No. 11. [Session 

the road, and spoke to him more particularly about the con- 
tract with Malone & Co., knowing that that was a large con- 
tract upon which much depended, lie informed me after 
inspecting or seeing about their work, that he thought 
they would execute their contract, and make money by 
it, and that they seemed to be getting on very well. 
In these conversations the opinion was expressed by me, in 
which Col. Eliason concurred, that it from any cause the road 
was forced to be sold, it would be better for the individual 
stockholders to make arrangements to become the purchasers 
(unless it was sold fur more than it was worth) and therein- try 
to save their stock, and 1 have made the same recommendation 
to the stockholders. Just before the adjourned meeting of the 
directors in December last, to which Col. Eliason had been 
directed to report his estimates of the work on the contract ot 
Malone & Co., he came to Morganton. lie called at my house 
late in the afternoon ot the day of his arrival. Being then 
very busy, I excused myself from conferring with him on busi- 
ness, but promised to call at hi.- room after supper. I got there 
about 9 o'clock, and remained until alter 12. AVc had a 1- 
conversation in which Col. Eliason talked a great deal about 
the condition and prospects of the road. Just before I left, he 
remarked that the road would have to be sold, and that it was 
very important that the creditors of the road in this State 
should be projected, and that they tdiouldjiold a majority of the 
mortgage bonds. He proposed to make the estimates on the 
contract of Malone & Co., so as to entitle him to 701 of these 
bend-, with what they already held, which would be a ma- 
jority of them; that they Bhoud receipt to the company for 
the bonds, and place 'J' 11 ' of them in his hands. lie said 
further, il I wanted any of them, I must get them from them, 
and requested me to mention this to Mr. "Wilson. I replied 
that I did not want any of them, and here the conversation 
ended, and I immediately went home, it 1 eing after 12 o'clock 
at night, lie made the impression upon me, front something 
he said which I do not remember, that the l'«i*> bonds were to 



1871-72.] Document No. 11. 353 

be held for himself and others. The meeting at Salisbury 
took place a few days afterwords. I met Mr. "Wilson on the 
train going down, and had a conversation with him. in which 
he repeated a part ot what had been said to me by Col. Eliason, 
and said to him that Col. Eliason wished to have an interview 
with him, and that I put him on his guard. The matter on 
which Col. E. wished to see him, was one of great importance, 
and I desired that he should fully understand from Col. E. 
himself what his proposition was. My object was that if I had 
done Col. E. injustice in my mind, it should be corrected before 
I spoke farther of it, and that if it was improper, that there 
should be some one else than myself to know it. Col. Eliason and 
Mr. Wilson had an interview afterwards at the Boyden House, 
at which I was not present, and therefore do not know what 
occurred, but I heard Mr. Wilson remark in an excited waj r , 
on coming out of his room, that Eliason had made a corrupt 
proposition to him. I met Wilson immediately, and Judge 
Merrimon was sent for, to whom Wilson repeated the substance 
of what had occurred. The next day Mr. Wilson, Mr. Ma- 
lone and myself being in a room together, Col. Eliason walked 
in and addressed Mr. Wilson, saying: "I understand, Mr. 
Wilson, that yon have been charging that I made a corrupt 
proposition to you," to which Mr. W. replied : "I said that 
you proposed t>> give me an estimate for more than was due 

to me, and that that would be dishonest-" I don't recollect 
whether he said it would be dishonest in both, or in him to 

take it, or in Eliason to make it. Eliason then commenced 
explaining, and then and at other times made the explanation, 
" that it was not strictly right, but that he desired to protect 
himself as a stockholder, and that other stockholders and cred- 
itors in North Carolina might have this protection against the 
Northern creditors." I do not give the whole of this conver- 
sation, but will do so, if desired, as far as I can recollect. I 
think I have given the substance of what was Col. Eliason's 
explanation. 

SAMUEL McD. TATE. 
23 



•354 Document No. 11. [Session 

Raleigh, September 28th, 1871. 

Colonel Tate coming before the Committee a second time 
on this clay, says, that since lite former examination lie lias 
thought of a transaction which took place in the Fall of lS 1 '-^, 
and wnich escaped his memory on his former examination. 

My. Swepson told me the State would pay her interest on 
the 1st of October, and gave me some money and asked me to 
have some bonds bought, and to sell them after the interest 
was paid, in my discretion. I had the bonds bought, and none 
of them were bonds belonging to any Hail road Company in 
Xorth Carolina, but bonds issued before the war. I was not 
the President of the Western North Carolina Railroad at that 
time. The bonds were sold early in October, for a profit of 
Mime £2,G00. I brought the statement of the whole transac- 
tion, as made out by the broker, and delivered it to Mr. Swep- 
son. Mr. Jenkins was present. After some conversation about 
it, which I don't remember, Mr. Swepson said he would give 
Jenkins the profits above $2,000, and then remarked to me, 
I might have half the reemainder for my time, trouble and 
expenses, and it was so settled. So for as I know, Mr. Jenkins 
knew nothing of the transaction until the settlement named 
was made, and was not a party in the speculation. The an- 
nouncement that the interest would be paid had not been made 
public at the time Mr. Swepson gave me the money to buy 
the bonds. 

In regard to the contract with Malone ^v Co., upon which 1 
was previously examined, I make this additional explanation : 

The 50 per cent, additional was made, not upon tin.' ag 
gate contract, but upon the work remaining to be done, not 
including Lr< >n, spikes, chairs and other material to be furnished. 
I state further, that 1 guaranteed the performance of the con- 
tract by Malone & Co., and that. I am endorser for them in 
bank, but without consideration. 

I am agent for several manufacturing companies for the sale 
of their ware-. A bill oi g Is for one of these companies was 



lS71-'72.] Document No. 11. 355 

sold to the Western North Carolina Railroad Company, and 
in their settlement with me, I found that the company allowed 
me a commission, which I did not expect to receive. I after- 
wards turned it over to the "Railroad Company, as I was then 
an officer of the company. 

Col. Tate being again before the Committee, says, "I may 
have signed a contract to build the road from Asheville to 
Paint Rock, but I have no recollection of having signed any 
contract different from that stated in my former examination. 
It was stated at the time to be a mere matter of form, and I so 
regarded it. 

SAM'L. McD. TATE. 

Sworn to and subscribed before the Commission. 

AFTEBNOON. 

Col. Win. A. Eliason appeared, was qualified and testified. 

Q. State your connection with the Eastern Division of the 
W. N. C. R R. 

A. I was elected Chief Engineer in 1S68, and continued as 
such till April 1871. Previous to that time I had been Assist- 
ant Engineer. 

Q. Do you know anything of the first contract made with 
Crockford & Malone for the mountain section ? If so, state the 
substance of it as well as you can without having the papers 
before you. 

A. The survey was made by Mr. McOauley who was then 
Assistant Engineer, who made up the estimates also, and they 
were all offered by the Chief Engineer, Mr. Turner. The to- 
tal amount of the contract with Crockford & Malone, for com- 
pleting the road, bridges, masonry, excavation, laying track, 
Arc, was 81,351,800 with 20 per cent, added as usual on En- 
gineer's estimates, as a contingent fund to cover deficiencies in 
calculations and other causes of error. The contract was let to 
Crockford & Malone at this sum, they taking the risk of con- 
tingencies. They commenced work and continued it until 



356 Document No. 11. [Session 

some time in the Spring of 1861, and then the work was stopped 
by mutual consent of the company and contractor. 

Q. State all the circumstances of the reletting of the contract 
to John Malone & Co. 

A. In Jan. 1S68 the contract was relet to John Malone & 
Co., at the same sum as to Crockford A: Malone, diminished 
by the work done by Crockford A: Mali ne, which was estima- 
ted at $27,000 nett, and with an addition of 50 per cent, to 
original estimates, making the sum of $1,958,700, which sum 
was the aggregate of the detailed estimates in the office of the 
Engineer, these estimates being made on the line as run by Mr. 
McCauley. In this contract the company reserved to itself the 
privilege of changing the line and altering the estimates in the 
following words : The contract says " the quantities and dispo- 
sition of excavation, embankment, masonry, &c, may be 
changed during the progress of the work, at the pleasure of 
the engineer, by alterations in the grades, curves, plans or 
character of any part of the work, and the calculations of 
quantities will be made anew for final settlement with the con- 
tractor." The line was (•hanged in the winter of L860— '61 for 
a very considerable distance on sections 6, 7. 8,9 and 10. The 
estimates for the work on this part wen. reduced by the sum 
of $171,293.00 in consequence of this change, and the 20 per 
cent, for contingencies, and the 50 per cent, additional would 
make the sum of $308,427.40, which being taken from the sum 
of $1,958,000 makes the sum oi $1,660,372.60. These estimates 
were made by myself and Mr. Prestman, and the originals are 
now on file in the engineer's office. The new location oi the 
road had not been adopted by the company until after the 
new contract with John Malone & Co., in L868, and no work 
had been done on the part where it was changed until that 
time. The work was done on the part of the new location by 
John Malone & Co., under my direction. 

Q. How mnch work by John Malone & Co., remains to be 
done on their contract ? 

A. By an estimate and calculation made? by Col. Coleman 



1871-72.] Document No. 11. 357 

under my direction there remains to be done, work of the value 
of $433,085.30 without the 20 the per cent, contingent fund 
This includes the 50 per cent, additional. 

Q. Who composed the firm of John Mai one & Co. 

A. I learn that the firm consists of John Malone, J. TV". 
"Wilson and Mr. Goldsboro, from Maryland. 

Q. Do you know of any officer of the road having received 
• anything, whatever, to influence his conduct in any way ? 

A. I do not. 

Q. Do you know if there has ever been a settlement with 
John Malone & Co., on the basis of this new contract, or of the 
old one ? 

A. No, I don't know that there has been any settlement un- 
der either contract, but if the new line is taken as the basis of 
settlement, I know they have been over paid. 

Q. Did you make any proposition either directly, or through 
Col. Tate to J. WV Wilson, to increase the estimate on the con- 
tract of John Malone & Co., so that they might be entitiled to 
receive 701 of the mortgage bonds of the company, including 
what they had already received, of which bonds 200 were to be 
placed in your hands for yourself and others ? If so state all 
the circumstances, and explain the transaction fully ? 

A. Some time in the fall of 1869 or 1870, 1 had conversations 
with Col. Tate, in relation to the condition of the road in which 
an apprehension was expressed by both of us, that the road 
would be sold out under the mortgage to secure the mortgage 
bonds, and several plans were suggested to prevent that from 
happening. In- one of those conversations in Morganton it was 
suggested that the sale of the road could not be forced, unless 
a majority of the bonds got into the hands of one person. I 
suggested to Col. Tate, that probably the contract with John 
Malone <fe Co. could be made useful in preventing the sale ; 
that they claimed compensation for their work according to the 
old estimates and contract with Crockford and Malone. I 
thought they were bound by the estimates on the line as 
changed by me, but that I would sign the estimates according 



858 Document No. 11. [Session 

to the old rates, with the understanding that 600 of the DO! 
were to be delivered to Maj. Wilson, and 200 were to be placed 

in my hands for the whole was to he held, so that they would 
not he put in the market, and get into the hands of the New 
York speculators, and thereby endanger the sale of the road. 
The 800 was to he divided between Maj. Wilson and myself, 
so that no one was to have a majority of the bonds. Col. Tate 
asked what inducement there would be for Malone & Co., to 
take an estimate to which they were not entitled, when they 
could not get the money for it. I replied that according to the 
books of the company there was between $40,000 and $60,000 
due them, and that these bonds were the only means out of 
which they could get payment, and further that they were 
large stockholders in the road. And if these bonds were put on 
the market and sold at the price they were then understood to 
be bringing, they would be lost to the company, and the road 
would be sold out, and Malone & Co., lose their whole debt. 
I afterwards agreed that if the plan could be carried into exe- 
cution Malone & Co., might take enough of the bonds to pay 
what appeared to be due them on the books of the company. 
I requested Col. Tate to sec Mr. AVilson and find out if he 
would assent to this plan. I saw Col. Tate some time after- 
wards when he told me that he had mentioned the matter to 
Wilson, and he declined to go into it, but that he did not seem 
to fully understand it, and that I had better see Wilson my- 
self, and thought that if J would talk to Wilson he would 
change his mind and agree to it. I met Mi - . "Wilson after- 
wards, and had a conversation with him on tin- subject, ex- 
plaining to him the plan I had suggested to Col. Tate. He 
said it was about as he understood it from Col. Tate and he 
still declined to have anything to do with it. He said he had 
no right to take the bonds out of the hands of the company, 
and if the Yankees got hold of them, they would pay at least 
13 cents on the dollar for them, and he had no right to take 
them out of the hands of the company tor nothing, and the 
plan was then abandoned. I replied that if he thought he had 



1871-72.] Document No. 11. 359 

no right to do it he was right to refuse, but that 1 thought it 
was right. Nothing more was afterwards done about it. I 
requested Col. Tate to consult other stockholders about this 
proposition, and there was nothing whatevei to be secret about 
it. It was not intended that I or any other stockholder should 
derive any personal benefit from such a transaction, but it was 
intended for the advantage of the road to save it from sacrifice. 
In this conversation with Mr. Wilson, there was no intention 
to propose a renewal of the plan, but merely in explanation of 
former conversations, as I had heard in the mean time that the 
bonds were in the hands of the New York Brokers. I had 
other conversations, the substance of which is the same as is 
here given. 

W. A. ELIASON. 
Sworn to and subscribed before the Commission. 

Dr. Mott, appeared, was sworn and testified. 

Q. In your statement before Gov. Holden and C. L. Harris, 
superintendent of public works, you stated that 393 bonds 
remain on hand with Clews & Co., hypothecated for a debt of 
$17,000, and 50 with Soutter & Co., hypothecated for about 
one thousand dollars. Please state what disposition has been 
made of these bonds since that time, who sold, and at what 
prices ? 

A. These bonds were sold from March 5th, 1870, to Sep- 
tember. Henry Clews & Co., sold on March 5th, 20 of these 
bonds, $20,000 at 21 cents, and $1 00,000 at 20£. On the same 
day Soutter & Co., sold $50,000 at 20|. On the 29th July, 
Bayne & Co., sold $270,000 at 20, and in September, Bayne 
& Co., sold $3,000 at 23, making in all $96,287, all of 
which has been expended in the construction of the road, which 
will appear in an authorized account furnished to a committee 
appointed to settle with me by the present board of directors.- 

Q. Give the commission such information as you may have 
in regard to the mortgage made by the company of their road, 



300 Document No. 11. [Session 

and the bonds issued and secured by the mortgage, and what 
disposition was made of them? 

A. Under an act ot the legislature passed 19th of December, 
18G0, the company was authorized to issue $1,400,000, and 
mortgage the road, franchise, *kc. This constituted a first 
mortgage upon all the property ot the road, and the road itself 
from Salisbury to Asheville having no other means to carry on 
the work, these bonds were used as security for procuring it 
for that purpose. I found no difficulty in borrowing money 
on this security as a collateral at 45 cents in the dollar. Two 
hundred and four thousand dollars was procurrcd in this way, 
the transactions being made for six months, at the usual rate of 
interest paid in New York on time loans, and on such security. 
Upon the maturity of these notes I found it necessary to apply 
or a renewal of the same and a further loan of $25,000 which 
the wants of the company required for the purpose of linisn- 
ing the remaining ten miles of road beyond Marion. Because 
of the increased distrust which had obtained during the sum- 
mer with regard to all southern railroad enterprises, and the 
breaking out of the European war which unsettled capital to a 
very great extent, and destroyed for the time the German 
market for American railroad securities, I found much difficul- 
ty in getting extension. Money was worth from 7 per cent, 
to I think as high as 8 per cent. " on call," -and no new nego- 
tiations on time could be made even with the best railroad 
collaterals. This was my information and I believe it correct. 
Alter long delay I succeeded in getting a renewal with the 
additional loan of $25,000 at the same rate of interest. The 
number of the mortgage bonds of the company, for the security 
of this money, was increased to six hundred of those which had 
been signed or issued, and in addition to these five hundred of 
those not issued (or in other words, blank bonds,) were placed 
with the parties from whom tin. 1 money was borrowed. This 
was done at my own suggestion, and to satisfy the lenders of 
the safety of the fund, and all to prevent any charges being 
alleged by any successor I might have that the fund was in a 



1871-72.] Document No. 11. 3G1 

scattered or loose condition. The transaction was looked upon 
by all who knew anything about it in Xew York as not only a 
good one, but fortunate tor the company, under the circum- 
stances, and I have reason to believe chat those to whom I have 
turned over the effects of the road are pleased with the conso- 
lidated condition of the mortgage fund, and with this transac- 
tion particularly. The balance of the bonds issued, I think, 
numbered 200, and were held as follows: $24,000 to secure an 
anti-war claim. of Norris & Son, of Philadelphia, for engines, 
and $24,000 in the same way by the Tredegar Iron Company, 
of Richmond, to secure payment for railroad supplies furnished 
by them, and 8150,000 are in the hands of John Malone & Co., 
paid them for working on their contract, and for which the 
company is allowed 75 cents on the dollar. The rate of interest 
paid is \\ per cent, per month, and is the usual rate charged 
for time loans on the mortgage bonds of all unfinished rail- 
roads. The remaining 100 bonds were unsigned and in the 
hands of the comprny on the 1st of April last. 

Q. What disposition was made of the loans raised on these 
first mortgage bonds ? • 

A. The proceeds were applied to the construction of the 
road, and accounted for to the committee appointed by the 
present board of directors. 

Q. Do you know who are the parties interested in the con- 
tract made with John Malone & Co. ? 

A. I do not know them all. I understand them to be John 
Malone, J. W. Wilson, and a man named Goldsboro, a resident 
of Baltimore. 

Q. Do you know anything of the contract made with these 
parties, and whether it was fair, bona fide^ and at reasonable 
rates, or otherwise ? 

A. The contract is in^vriting, and filed with the papers of 
the company. So far as I know there is nothing fraudulent 
in its character. Xot being an enginer, I do not consider my- 
self capable of judging or forming an opinion with regard to 
this particular work, which is peculiar and of great maguitude. 



3G2 Document No. 11. [Session 

I do not know that any ot the officers of the company have, 
or have had, any interest in the contract. I had nothing to 
Jo with these contracts, which were all made prior to my con 
nection with the road. 

Q. State whether anything, cither bonds, money, or any 
thing else, was paid, or agreed to be paid, by you or by any 
other persi . r the purpose of procuring the passage of any 
act through the Legislature '. 

A. I paid none myself, either directly or indirectly, in 
my own knowledge do I know of anything being paid by 
other parties. I hare heard nothing but rumors of such trans- 
actions. 

Q. Did you or any one connected with your company pay 
out any money, bonds, or other thing, to procure a favorable 
decision of the Supreme Court, on the constitutionality ot the 
special tax bonds '. 

A. I paid nothing for that, and know of no sums paid by 
others. 

Q. Do you know ot any bonds being sold and replaced at a 
less price than sold for by any officer of any railroad company, 
or of any individual having been allowed to use bonds in any 
way for his own advantage? 

A. I do not 

Q. Do you know anything in relation to State bonds, in 
addition to what you have stated in this deposition, or before 
the Bragg Committee i 

A. I do not now remember anything else in addition to 
what I have stated. 

.!. J. MOTT. 



Kai.i.k.ii, Sept. 12th, 1 ^71. 

Mr. J. W. WlLSON appeared, was sworn and testified : 

Q. What official position have you heretofore occupied in 



1871-'72.] Document ho. 11. 363 

the W. N. C. P. R. Co., aud what is your present connection 
with that Company ? 

A. I have been Chief Engineer and Superintendent, and 
was appointed in the summer of 1SG1, and held it until the 
appointment of the Provisional Governor of this State. I was 
then re-appointed by the Directors appointed by Gov. Worth, 
and held my position up to sometime in the spring of 1867, 
when I resigned. I have been a contractor since my resigna 
tion as Chief Engineer and Superintendent, but am not now 
at work. 

Q. "Who are yoiu partners in the contract, and what is the 
extent of it? 

A. John Crockford, John Maolne and John Goldsboro. 
Soon after the work commenced, Crockford died, and the work 
was carried on by the surviving partners. The contract is ten 
miles, embracing the whole mountain section. 

Q. Are any of the officers of the road, except yourself, in- 
terested in that or any other contract on the road ? 

A. Hone that I am aware of. Col Tate was appointed trustee 
and fiiiaiacial agent to hold the funds of the road. He was 
appointed by the Board of Directors in the fall of 18G8. He 
is to receive his pay, if any, from the Company, and not from 
any of the contractors, to my knowledge. 

Q. Will you state by whom the original estimates for your 
contracts were made ? It the}' have been raised since the war, 
and if so, how much, and under what circumstances? 

A. The original contract was made to Crockford, Malone <fc 
Co. on an estimate made by 11. C. McCauley, principal Assis- 
tant Engineer, and approved of by J. C. Turner, Chief Engi- 
neer. The contract was signed by Dr. A. M. Powell, Presi- 
dent of the Company, in September, 1800. On October 19th, 
I860, the work on the road was ordered to be resumed, (having 
been suspended since the war) and the estimates raised accord- 
ing to the depreciation of currency, 50 per cent, on the original 
estimates, as appears by resolution adopted by the following 
Board of Directors : S. W. McD. Tate, President, II. Rey- 






3(U Document No. 11. [Session 

nolds, A. M. Powell, A. M. Erwin, F. E. Shober, G. F.David- 
son, J. C. McDowell, Mr. Murphy and A. S. Merrimon. The 
following is the resolution copied from the books of the Com- 
pany : "Resolved, That the President of the Board he author- 
ized to take steps at once to let to contract the. road from Mor- 
ganton as far west as may be practicable, and upon such terms 
as he may deem best, for the interests of the Company for the 
speedy completion of the road. That the President be further 
authorized to advance 50 per cent, on the old estimates in let- 
ting such contracts." 

Q. Did you have anything to do with raising the estimat 
in any way '. 

A. Xone whatever. The Board followed the precedent set 
by President Caldwell in letting the contracts from the head 
of the road to Morgan ton, which were considered as made at a 
fair compensation, on account of the depreciation in the currency 
and the advanced price of labor, supplies, &c. All the esti- 
mates from Morgantou West were raised in the same propor- 
tion, without exception, and every contractor, with one or two 
exceptions, working under those increased estimates, has since 
asked for extra allowances, showing that the estimates were 
not excessive 

Q. "Will you state why yon resigned, at the time you did, 
your position as chief engineer and superintendent \ 

A. 1 resigned in order to get into business, anticipating that 
I would he removed on a change of the administration of the 
road. 

Q. Did you not regard the contract made with Malone & 
Co. as a very favorable one to the contractors '. 

A. I regarded it as such from hearsay, never having seen 
the work to be done. I was induced to go into it b}* Mr. 
Malon .«. on account of my experience, the work being one of 
gnat magnitude, and difficulty. 

Q. Has your company realized large profits from this con- 
tract I 

A. "We have not. "We would have done so having connected 



1871-72.] Document No. 11. 365 

with it a store, and had we been paid up regularly. As it is, 
the company is largely indebted to us, and we see no prospects 
of payment, and under present circumstances we think we have 
lost largely. "We have received from time to time from the 
company, in cash and bonds about $600,000, all of which has 
been paid out. The estimate of the whole contract was $1,958- 
000 two thirds of which was in cash, and one-third in the stock 
of the company, that included iron, crossties, and everything re- 
quired to put the road in perfect running order. The company 
according to the estimates of Col. Coleman, the present Chief 
Engineer is indebted to us about $220,000. 

Q. Ilave you any knowledge or information that any moneys 
received by the officers of the company, have been improperly 
applied \ 

A. I have not. I have no knowledge or information that 
would lead me to believe that it was spent otherwise than in its 
legitimate application. 

Q. Have you made any contract, or had any understanding 
with any officer of the road by which }'ou were to recieve more 
than the original estimates '. Or has any proposition of that 
kind been made to you ? If so, give the commission the full 
information on the subject \ 

A. I have made no contract, or had no understanding with 
any officer of the road, nor have my partners by which we was 
to receive more than the original estimates. A proposition was 
made to me by Col. Eliason then Chief Engineer, through Col. 
Tate, first, then afterwards directly to me, that if I would turn 
over to him $200,000 of first mortgage bonds ]ie would make 
out my estimates for $701,000 in addition to what I had re- 
ceived, this amount would be a majority of the first mortgage 
bonds. This proposition I declined as it was much more than 
was due me, and 1 regarded the transaction as corrupt. In jus- 
tice to Col. Eliason, I will state, he Btated that in a subsequent 
conversation he intended that these bonds were only 
to be 'held in trust by us to prevent them being squan- 



866 Document No. 11. Session 

dered. 1 1 » > \\ _ he was to get possession of the 7"" bonds,] have 
do information. He did not disclose it to me. 

Q. I >oyou know of any money, bonds or proceeds of bondi 
anything of value being paid or offered to any member of the 
Legislature or to any official, to influence his action in procuring 
the passage ot any bill making appropriations to railroads, or 
tor other purposes through the Legislature '. 

A. I do not. I know nothing more than I have stated in 
connection with this road. 

Q. "Will you state how much of this road has been completed 
since the wort was resumed, and how much of the mountain 
section has been done '. 

A. The road has been finished from Morganton t<> ( >M Fort, 
a distance of 33 miles. In addition to this four fifths of the 
Mountain work has been done, and about one fourth of the 
work from the top of the Mountain to Aslicville. According to 
a rough estimate it would take about sOOO,000 to put the road 
in running order, from the head of the road to Asheville. The 
whole length of the road completed From Salisbury, west is 1 15 
miles. In addition to what the company is indebted to me. I 
could finish the Mountian section for $200,000 cash. 

JAMES W. WILSON. 



1871-72.] Document No. 11. 3(57 



WILMINGTON, CHARLOTTE AND RUTHERFORD 

RAILROAD. 

Raleigh, July 28, 1871. 

Dr. Wm. Sloan appeared, was sworn and testified : 

Q. When did yon become president of the Wilmington, 
Charlotte & Rutherford Railroad, and how long did you con- 
tinue to act ? 

A. Sometime in the latter part of July, or in August, 1869, 
and continued to act until some time in October, (say about the 
20th,) 1870, and kept control of the western end until January, 
1871. 

Q. Was it understood when the act amending the charter of 
said road, ratified the 29th day of January, 18G9, passed the 
legislature, that you were to be made president in place of the 
then president ? 

A. Not that I ever heard. There was no understanding by 
me with any one to that effect. 

Q. State all you know, or have heard in reference to alleged 
understanding between one or more of the presidents of the 
railroads in this state, and M. S. Littlefield, either alone or in 
connection with others, as to compensation to be made to him 
or them, for his or their services in procuring the passage of 
acts through the legislature authorizing the isssue of state 
bonds in aid of these roads or any of them. 

A. There was no agreement or understanding between me 
and Littlefield in reference to the passage of the act in aid of 
the Wilmington, Charlotte and Rutherford Railroad, and I 
heard nothing of an}' agreement or understanding with him in 
reference to the bills in aid of the railroads. I opposed the 
passage of the bill in aid of the Atlantic, Tennessee and Ohio 
Railroad, principally on account of the gauge. Littlefield came 
tome one day and said that if I would withdraw my op] 
tion to the bill it would pass, and he would get ten per cent, on 



3CS Document No. 11. [Session 

the amount for getting it through, and would divide it with me 
it I would withdraw my opposition. This I declined to do. 
Littlefield more than once stated to me in conversation that it 
would require " grease " to get the bill for the Wilmington, 
Charlotte and Rutherford Railroad through the legislature, by 
which phrase I understood money, or the promise of it. I 
told him if it required ''grease" it would not go through with 
my consent, as I was oppose to furnishing it. 

Q. Were there any con tracts or understanding in your 
knowledge or information made with Littlefield or any other 
person, by any officer of said road, or any person connected 
therewith, for the payment of anything to him or them, for 
their aid in procuring the passage of the said bill and whether 
anv payment whatsoever has been made by any person for that 
purpose ? 

A. I know of no such contract or understanding between 
anv parties whatever. I know of no payment, whatever, made 
for any such purpose. 

Q. Do you know of any money, bonds, or anything else paid 
by the A. T. & < >. R. 1!.. or any other road, lor the purpose 
indicated in the above question '. 

A. I know of none, except 20 bonds which were paid tome 
under the following circumstances : 1 was opposed to the pas- 
sage of the act making appropriations to the A. T. & ( ». R. R. 
on account of the gauge. Before final action on the bill, there 
was a conversation with Littlefield and Swepson, in which Mr. 
Littlefield .-aid he could pass it over my opposition. This 
occurred in the lobby of the House of Representatives. The 
vote was thru taken, and the bill defeated. Mr. .Swepson 
afterward.- senl for me to come to see him, which I declined to 
do. C aiterwards met Gen. Littlefield near the Washington 
monument in the Caj it«>l Square, and some warm words took 
place in reference to this hill and that making appropriations 
to the W. C. &. R. R. R., Mr. Ik S. Guion being present. 
That night, at the Yarboro' House, Gen. Laflin came to me 
in the office, and stated that Swepson said he wanted to see me 



1871-'72.] Document, No. 11. 36$ 

in the back porch. I told him to tell Mr. S. to come in the 
office to see me. He said Mr. Swepson wished to see me 
in the back porch. I then went out to where Swepson was. 
He manifested a good deal of interest in the passage of the 
bill, and expressed fears that if this bill was defeated, it would 
defeat the other bills in which he was chiefly interested. He 
proposed that if I would withdraw my opposition, I might 
change the guage to conform with the N. C. R. H., and make 
such other changes as I desired in the charter, and besides he 
would give me 40 of the bonds of the road if the bill passed. 
I told him he might give the bonds to Gen. Laflin, who was 
present, that it the gauge was changed and some other slight 
changes made in the charter, I Avould withdraw my opposition 
He told Gen. Laflin to make the changes in the bill indicated 
by me, and I told him to say to my friends in the Legislature, 
next morning, that I withdrew my opposition to the bid, as 
these changes had been made. Next morning the bill was re- 
considered, the changes were made in the charter, and it finally 
passed. After I was made President of the W. C. & R. R., 
I was in New York, where were also Mr. Swepson and other 
persons connected with railroads in this State. Mr. S. came 
to me and proposed that I should enter into an arrangement 
with other persons there, who held State bonds for sale 
whereby all the bonds held by them should be placed in the 
hands of one party for sale. I stated to Mr. Swepson, that I 
did not think I had the right to do this without the consent of 
my Board of Directors, and said that I did not think any Presi- 
dent had a right to sell the bonds issued to his road, without 
the order of the Board of Directors, directing how, or in what 
amounts and at what price they should be sold. I further 
stated that I had not yet received any of the bonds directed to 
be issued to my road, and did not know when I should receive 
them. I declined to go into this arrangement without the con- 
sent of my Board of Directors. This occurred in September 
or October, 186H. The agreement spoken of had been reduced 
to writing, and had been signed by the other Presidents of the 

24 



■"~ ,) Document No. 11. [Session 

Railroads, holding bonds fur sale. I signed it, with the under- 
standing that it was to be submitted to my board for their 
action. I brought a copy of the agreement home, and sub- 
mitted it to them, and they unanimously rejected it. In the 
same conversation with Mr. Swepson, mentioned above, lie 
said that he believed he owed me 40 bonds for withdrawing 

CI 

my opposition to the act in favor of the A. T. tfc O. Railroad. 
I replied, yes, that he did say something about giving me that 
number when we we were in Raleigh, and I had told him to 
2ive them to Gen. Lallin ; that I would now take 20, and he 
might give the other 20 to Gen. Lafiin. My object in talcing 
these 20 bonds was to keep them all off the stock boards, be- 
cause I thought them unconstitutional. I was expecting mv 
bonds, and if a large number was put on the stock board, it 
would depreciate the price of all N. C. special tax bonds, so 
that I used them for that purpose and have them still. 

Q. Why do you still retain those bonds in your possession I 

A. liecause I received them from Mr. Swepson, and neither 
he nor the State Treasurer has made any demand for them. 
Mr. Wm. Johnson, the President of the Atlantic, Tennessee 
and Ohio Railroad, has made a request by letter for their re- 
turn. 1 made no reply to the letter. 

Q. Do you remember who signed the written agreement 
mentioned above for the sale ot bonds? It so, please give 
their names. 

A. I think nearly all the railroad presidents in the State, 
Dr. Mott, A. J. Jones, R. Y. McAdcn, as attorney for the 
Atlantic, Tennessee and Ohio Railroad, G. "W. Swepson and 
S. McD. Tate. 

Q. Please state the contents of that agreement as well as 
yon can, and its objects? 

At I don't remember the details, but the object Mas to con- 
centrate the bonds in the hands of some one broker, who was 
to dispose of them in Mich quantities and at such prices as 
might be agreed upon by the parties to the contract in the 
future. 



1871-'72.] Document No. 11. 371 

Q. Was this agreement ever carried out by the parties who 
signed it ? 

A. It was not. It fell through, as I understood. 

Q. Do you know anything about Swepson, A. J. Jones and 
other parties who were in New York about that time, entering 
into agreements to speculate in bonds of the State, or do you 
know anything else of bond speculations in New York about 
that time ? If so, state all you know about it. 

A. I know nothing except what I heard from A. J. Jones. 
I understood that there were several parties buying bonds, 
and Jones told me oh one occasion that arrangements had 
been made between him and other presidents to buy up bonds 
to keep up the credit of the State ; that he considered me in, 
and I ought to help make up his losses, which I declined to 
do. I told him there were no bonds on the market except 
those held by the presidents, and I could not see how there 
could be any losses when they were buying each other's bonds. 

Q. Do you know what bocame of the bonds held by A. J 
Jones as president of the Western Railroad ( 

A. I do not. 

Q. Do you know anything of Jones or Swepson, or any ot 
the railroad presidents, selling large amounts of bonds ? 

A, I do not, only from hearsay. 

Q. Did Jones tell you, or have you any means of knowing 
how much he lost by these speculations '( 

A. He told me he lost largely, but did not say distinctly how 
much, and I have no means of knowing. 

Q. Do you know how he lost I 

A. I only heaad the rumor, that Jones was gambling, but 1 
do not know the fact. 

Q. Were you interested in any way with Jones in these 
bond speculations, or did he lend you any bonds, or did he 
put up any margin for you in any way whatever? 

A. I was in no way connected with him. He frequently 
offered to lend me bonds, which I always declined. 

Q. Was any demand ever made upon yon by Clews 6; Co 



872 Doctmkat No. 11. [Session 

or by any other banker, to pay your proportion of the losses 
sustained by railroad presidents, or any other persons? 

A. No. 

Q. Was Governor llolden and Treasurer Jenkins, or either 
of them, in New York in September, 1869, or the first of 
October '? 

A. They were (here the last of September or first of < >etc- 
ber. 

Q. Do you know whether they had any interest in, or con- 
nection with, these bond speculations 1 

A. None that I know of. 

Q. Do you remember of being at the banking; honsi 
Soutter & Co., in September, 1869, when you met A. J. Jones, 
Dr. Mott, Col. Tate, Swepson and others, in consultation about 
the State bonds? If so, state what occurred to the best of 
voiir knowledge and recollection. 

A. I remember of going there as one of the committee ap- 
pointed by these presidents to consult with Mr. Porter, of that 
house, in order to make some arrangements about these bonds. 
I saw Mr. Porter. We talked the matter over. Mr. Porter 
seemed to be the man of their choice to carry out the pur- 
poses of the agreement mentioned before. Mr. Porter required 
some exhihit from these presidents, and some concessions. 
There was disagreement about the terms, and nothing was 
concluded. 

Q. When did your board reject the proposed [agreement 
which was signed by you conditionally, and which was before 
mentioned, and why did they reject it '. 

A. They rejected it immediately after my return from New 
Y<>rk in October, for the reason that they did not like to enter 
into any agreement of this character with parties there, believ- 
ing it would put them entirely at the mercy of then' parties. 

I further thought that Mi-. Swepson might have the controlling 

influence, and manage them to suit his own interests to the 
detriment of my company. 1 gave the hoard my views fully 
on the subject, which were adverse to accepting the proposi- 



1871-72.] Document No. 11. 373 

tion, and a few days thereafter I stated in a public meeting of 
the stockholders that I was opposed to taking less than 80 
cents in the dollar for the bonds. This meeting of the stock- 
holders took place about the 20th of October. 

Q. What were the special tax bonds worth from September, 
18G0, to January, 1870? 

A. I don't remember the prices. They went down steadily 
after the gold panic, before which they were worth from 50 to 
60 cents. 

Q. What were they worth in January, 1870? 

A. ]\iy impression is they were worth in the neighborhood 
of 20 odd cents, with 7-i cents, off. 

Q. Did your Board authorize the contract made by you with 
John F. Pickrell, in January, 1S70 ? 

A. In January, 1870, I was summoned to New York sud- 
denly to redeem §500,000 of the first mortgage bonds of my 
company, which had been hypothecated by my predecessor, 
Col. Cowan, with the New York Warehouse and Security 
Company, to secure a loan of $150,000. I had but two or 
three days to raise the money, and had no other securities 
except the special tax bonds. After making an effort to raise 
the money, I found the money market in New York very 
tight, and not being able to get the money elsewhere, I made 
this contract with Mr. Pickrell, which was the best I possibly 
could do. Soon thereafter it was approved of by the Board of 
Directors of my road. 

Q. What were the first mortgage bonds of your road then 
selling for ? 

A. 1 heard from rumor they worth from 50 to 60 cents in 
the dollar. 

Q. Were you in Raleigh at the time the bill passed reorgan- 
izing the Wilmington, Charlotte and Rutherford Railroad? 

A. I was. 

Q. When did Gov. Hold en first speak to yon about the 
directory of that road ? 

A. It was several weeks after the passage of the bill when. 



374: Document .No. 11. [Session 

he told me he was much pressed to frame the board, in order 
that Mr. French should be made president. He told me he 
preferred that I should be the president, and that my name had 
been urged upon him by several parties, I do not remember 
whom. Nothing was said to me by Gov. Ilolden about being 
president until after the passage of the bill. During the pendency 
of the bill and afterwards, I was frequently spoken to by my 
friends in connection with the presidency, and its acceptance 
urged upon me. Littlefield mentioned the subject to me 
during the pendency of the bill. The remarks by him hereto- 
fore recorded, about requiring " grease," were not made in 
connection with the presidency. 

Q. "Were Swepson and Littlefield partners, or did they seem 
to be so, in procuring the passage of railroad bills, and which 
of them seemed to have the greatest influence over the legisla- 
ture ? 

A. I do not know that they were partners, but they seemed 
to co-operate in their operations with the Legislature. I have 
no doubt of it, though I do not know it positively. Mr. Little- 
field seemed to be the most active man. but Mr. Swepson in 
my opinion really possessed the most influence. 

Q. Did Swepson say nothing to you about giving you 20 
bonds for signing the agreement in New York i 

A. No, but on the contrary, I told him in the presence of 
A. J. Jones, that I received those bonds from him with the 
distinct understanding that it had no influence whatever on 
me, in signing the agreement, upon which he said, " No, of 
course not ; it was due to me, audit was only fulfilling his 
former promises." 

Q. When did you receive the 20 bonds of the A. T. A: ( >. 
Railroad i Was it before or after you signed the agreement .' 

A. It was somewhat about the same time. I think a day or 
afterwards. 

Q. You have stated iii the former part of your examination 
that you took the 20 bunds of the A. T. »V < >. Railroad for the 
purpose of keeping them all off the stock board. How do 



l871-'72.] Document No. 11. 375 



you reconcile that with the agreement with your associates, the 
attorney of the A. T. & O. Road having already signed the 
agreement above spoken of? 

A. I did not consider the bonds constitutional, and there- 
fore he would have none to put up, and it was urged by parties, 
those interested in bonds, that unless there was some concert 
of action between parties holding the bonds, they would be 
thrown off the market at once, and I believed that my condi- 
tionally signing the agreement would enable me to draw the 
bonds belonging to my road. 

Q. What do you mean by drawing the bonds ? 

A. I mean drawing from the State Treasurer all the bonds 
belonging to my road, of which I had received none, while all 
the other roads had got theirs ; and I looked upon Mr. Swep- 
son as in my way in getting the bonds. 

Q. Do you mean to say that Mr. Jenkins was privy to this 
agreement, and that there was any understanding between him 
and Swepson to withold your bonds ? If so, state all yon know 
about it ? 

Q. I do not mean to say there was any agreement between 
them, that I know ot, but I believed that Mr. Jenkins might 
be readily deceived by Mr. Swepson in regard to getting out 
the bonds, in connection with the statement that the plate was 
broken. 

Q. Do you know that the bonds ot Swepson, for the West- 
tern North North Carolina Railroad were issued prior to all 
others ? 

A. I have understood so. 

Q. Did not Treasurer Jenkins frequently tell you, when you 
applied for your bonds, that he could notiurnish them, because 
the plate was broken ; and did yon not inquire in New York 
about that matter '( If so, state the result of your inquiry. 

A. Yes ; he frequently told me he could not get the bonds, 
as the plate was broken. On meeting him in New York, I told 
him (Jenkins) it was strange I could not get my bonds, as the 
A. T. ifc O. Road, and others, had got theirs. I could not under- 



37*'» Document No. 11. [Session 

stand why mine could not be printed as well as theirs, and I 
believed they were printed. We then went together to Mr. 
Porter, of the House of Souttcr & Co. I asked Mr. P. if the.-, 
bonds had been printed. lie said they had all been printed at 
the time Col. Cowan got his, mine as well as others. Jenkin- 
then asked him, "why did you write to me that they were not 
ready V Porter replied, ''he had not so written, and that Jen- 
kins had misunderstood his letter, if he so construed it." Jen- 
kins insisted that Porter had so informed him. 

Q. What disposition did yon make oi the $2,000,0i f 

bonds drawn by you for your road '. 

A. I hypothecated $1,700,000 ot them with John F. Pick- 
rell, ot New York, according to the contract "A," before men- 
tioned, already filed. I deposited the other $300,01 with him 
for safe keeping, subject to the order of the President ot the 
road for them. I took Piekrell's receipt forthem, which 1 still 
have. He had no claim whatever upon them, but they arc 
still in his hands. 

(,). What disposition has been madeof the $1,700,000 ? If 
sold, when, al what price, and to whom ? State ull you know 
or have heard as to this matter. 

A. J cannot tell you anything about it. They were not sold 
to my knowledge. He (P.) served a notice on me, or wrote 
to me about the time I went out of office, just before or after, 
but after the election at Wilmington, I think, that he wanted 
his money according to the contract, and all I know of the 
sales is in his account rendered. 

Q. Did he eveT render to you any accounts as between him- 
self and ^our road, arising out of the contract before referred 
to, and connected therewith? 

A. Yes, he presented his accounts. I don't remember when 
or up to what date. 

Q. Did you approve of the accounts as rendered by Mr. 
Pickrell \ 

A. Yes. 



1871-72.] Document No. 11. 377 

Q. State whether the accounts now handed you are correct 
copies of the accounts that you approved. 

A. They are correct to the best ot my knowledge. I think 
the accounts marked B 1, B 2, and B 3, are copies of the 
accounts furnished me by Mr. Pickrell. The account marked 
D, I cannot say whether it is a copy of the one sent me or not, 
without examining letters and refreshing my mind. I did 
not think he had rendered me any account of the sale of the 
bonds which is credited in this account. 

Q. Have you any recollection of approving accounts ren- 
dered by Mr. Pickrell on more days than one % 

A. I cannot now recollect. I do not now recollect when 
they were approved or where. Mr. Geo. W. Grice acted as my 
accountant, and examined the accounts for me. 

Q. What interest and commissions was Mr. Pickrell to 
receive for performing his part of the contract? 

A. He was to do the business for 7 per cent, interest and 
the usual commission for doing that kind of business. 

Q. What was the usual commission charged by Bankers i 

A. From 1^- to 24- per cent, per month. I could not get 
any one to do it for me for less than 2-J- per cent. 

Q. Is it customary for the brokers in New York to charge 
2^ per cent, per month commission, and 7 per cent, interest, 
and then commissions upon the interest upon each renewal ? 

A. I do not think it is usual. It depends upon the security 
offei'ed. 

Q. Why is the sum reported due Pickrell in your report, 
to-wit, $397,000, different from that in the account of Pickrell 
approved by you October 18th, including the date to October 
loth, showing a balance of §464,000? 

A. The $397,000 was passed on the books of the Treasurer 
as received from Pickrell, and the account rendered after- 
wards, and not embraced in the report. The financial year 
ends on the 31st of August, and does not include charges 
for commissions and the payment for coupons on first mort- 
gage bonds which were added in afterwards. 



378 Document No. 11. [Session 

Q. Was there any agreement by which you were to pay 
Piekreli's travelling expenses? 

A. There was not. On the con srary, I objected to it, but 
he claimed it as customary, and I at length yielded, rather 
than make a difficulty about it. 

Q. Was there any contract, understanding or agreement 
whatever, between you and Mr. Pickrell or any other person, 
in reference to tin- railroad bonds, outside of or different from 
the written agreement herewith filed? 

A. None whatever. 

Q. At the time you made your report as President on the 
20th of October 1870, did you not say to F. W. Iverchner and 
Mr. Cronly that the account rendered to the President and 
directors was all that was due to Pickrell by the company ? 

A. I remember no conversation with Mr. Cronly. I may 
have stated to him and other persons that I owed Mr. Pick- 
r 11 what additional interest and commissions that had accru- 
al, and the coupons he had paid of tho first mortgage bonds. 

Q. Did you not at that time state that the money was bor- 
rowed from Pickrell at 7 per cent, interest, and did you say 
anything about commissions, travelling expenses, <fcc. ? 

A. I did sa}' the money was borrowed at 7 per cent, interest 
with the usual commissions. 1 said nothing about travelling 
expenses, as at that time no charges had been presented, and 
when they were, I objected to them. I did not state what 
amount of commission was charged, as I did not then know 
what they would be. Mr. Pickrell said if these charges did 
not meet with the approval of the board, he was ready to sub- 
mit it t<> two impartial persons lor reference, but that he was 
only making the usual charges. He told me this when I 
ned my approval of the accounts, and at which time I made, 
my objections, and approved them with the understanding 
they were t<> be arbitrated as the easiest way of settlement. 

0. Do \nn remember seeing Pickrell or any agent of hie at 
Charlotte on the 18th of October? 



1871-72.] Document No. 11. 379 



A. I don't remember, but I don't think I did. I signed 
these papers in New York. 

Q. Do you not know that Silas Martin alter he was elected 
President (on or about the 20th ol October) or shortly there- 
after, notified Piekrell of the fact of his election, and demanded 
the accounts against the company, and expressed a willingness 
or desire to settle the coupons he had paid of the first mort- 
gage bonds. 

A. I have heard Mr. Pickerell say that he had received a 
notice of that kind from Mr. Martin. 

Q. Why did you, alter Martin was president, and after Piek- 
rell had received notice, approve his account on the 20th of 
November, 1870? 

A. I did approve it, for the reason that 1 beiieved I was 
president of the road. I held possession of that part of the 
road west of Charlotte. 

Q. Why was no charge of commissions made in the account 
of Piekrell presented to the company, and embraced in the 
treasurer's report, included in the account? 

A. It had not been presented to me lor approval at that 
time. 

Q. Why were the 300 bonds not returned to the treasurer? 

A. Because my board *)f directors passed a resolution pro- 
hibiting me from doing so, and since I have gone out of the 
presidency I sent the receipt to Mr. Badger, the attorney for 
the company, to give to the treasurer, that he might collect, if 
he wished. The receipt was refused by the treasurer, and it 
was returned to me by Mr. Badger, and it is now in my pos- 
session. 

Q. Did you sell to Mr. Piekrell any property while you were 
president of this road \ If so, state what it was, when you 
sold it, at what juice, and how you were paid for it, and when? 

A. I sold him half of my sulphur mine in Gaston county, 
sometime in the summer ot 1870, fur $25,000. I was paid in 
cash at the time ot sale. I think the property was worth more 
than I sold it lor. 1 sold it to him with a view ol getting him 



380 Document No. 11. [Session 

to raise a joint stock company to work it, which he promised 
to do. The company has been incorporated, and I am informed 
$100,000 has been subscribed to it, and would have been 
worked, but for political troubles in that section. Gen. Hoke 
is familiar with the property, to whom T refer the commission 
for information as to its value. 

Q. State all you know of the payment and settlement of 
certain bonds known as the anticipation bonds, due from the 
W. C. & R. Railroad Co ? 

A. When I was elected president in July, 1869, 1 introduced 
a resolution giving the old board three months in which to 
settle their old accounts. Mr. Cowan came to me before the 
resolution was introduced, and said he would like to have sonic 
time to settle up, and asked for thirty days. 1 introduced the 
resolution giving him ninety days. I know that these bonds 
known as anticipation bonds, were selling very low in the 
market, say from 30 up to 80 cents. A large amount, nearly 
all of them*have been paid by the company at their full value. 
I suppose, though T do not know. 

Q. Do you know whether or not these bonds were bought 
up directly or indirectly by the officers of the company, or 
their agents, at less than their face value, or for less than they 
were afterwards redeemed at by the eompany I 

A. I do not know the fact, but have heard the rumors which 
are very currently reported. 

Q. Was the matter ever investigated by the company \ 

A. Never, that I have ever known. 

Q. Have the accounts of the officers of the company immedi 
ately preceding your administration ever been regularly audited 
and settled with the company ? 

A. I presume they have been audited and settled by the 
finance committee, but I do not know. 

Q. What amount did Col. Cowan receive on the $1,000,000 
of bond- issued to him under the act of 1869, immediately be- 
fore you came into office? and what disposition did he make 

Of Ltl 



1871-'72.] Document No. 11. 381 

A. I don't remember what amount be got. My recollec- 
tion is that he sold for fifty odd cents with the commissions off. 
I don't know what he received, but suppose in the neighbor- 
hood of half a million dollars. The sum was applied to sat- 
isfy old liabilities of the company, and particularly in taking 
up these anticipation bonds. 

Q. Did he leave large liabilities of the company in New 
York unprovided for ? 

A. Yes ; I do not remember the full amount. 

Q. What is meant by anticipation bonds? 

A. It is a bond issued to the contractors for work done on 
the road in anticipation of bonds to be issued by the State on 
the completion of each section of 25 miles, and was among the 
first debts of the road contracted. 

Q. Do you know anything of the contracts made for grading 
the road from Cherryville to Rutherford ton, and who were 
the parties to it ? If so, state all you know about it. 

A. The contract was made by Mr. B. S. Sumner with Col. 
Cowan to grade the whole road from Cherryville to Ruther- 
fordton. The contract is on file ; I do not remembei»the terms. 
My understanding was thatB. S. Gnion, at that time, assistant 
superintendent of the road, V. A. McBee, treasurer of the 
road, and Jasper Stowe were interested in the contract. I do 
not remember whether Mr. Sumner was at that time a director 
or not. I know nothing more about it. 

Q. Do you know, or have you heard, of any State bonds, 
money or other thing of value having been used by Gen. Lit- 
tletield or any other person, either directly or indirectly to in- 
fluence the action of the Legislature, or any member thereof'^ 

A. None to my knowledge. 

Q. Was anything paid by the Wilmington, Charlotte and 
Rutherford Railroad, or its officers, to employ counsel in the 
University Railroad case, or in any way whatever to establish 
the validity of the special tax bonds by the decision of the 
courts ? 



382 Document No. 11. [Session 

A. Nothing w as paid by the road « »i its officers to my 
knowledge. 

Q. State it you know, or have heard of any State bonds or 
money, or any thing of value having been given to or received 
by any officer of the State, or any officer of any railroad com- 
pany, in which the State is interested or to which it has issued 
bonds, either directly or indirectly to influence their official 
conduct ? 

A. I do not know, and have heard nothing. 

Q. Did you buy any bonds in New York in September, or 
October, 18G9 ? 

A. None. 

Q. "Was Gov. Ilolden in New York in the summer of 1809, 
and had you any conversation with him, and upon what mat- 
ter j 

A. Yes, he was there then. I had some conversation with 
him in regard to the administration oi railroad matters in the 
State, in which I stated that I differed very widely Iroin Mr. 
Swepson in relation to these matters, and the sooner he got rid 
of Mr. Swepson, the better it would be for the interests of the 
State. The Governor replied that he was no financier, and in 
these matters that might be an honest difference of opinion. 

WM. SLOAN. 

Sworn to and subscribed before the commission. 

Raleigh, Nov. 1 7th, 1871. 

Dr. Win. Sloan, appeared again before the commission, and 
desires to make the following additional statement to bis former 

deposition : 

In September L went to New York, and Mr. A. .1. Jones 
informed me that he and the other Presidents were bulling the 
bonds. That night, at the St. Nicholas, they had a meeting 

at which I was present. Some arrangements were attempted 
to bo made whereby all the parties who had purchased bonds 
should place them in the hand- ol BOme one man, who was to 



lS71-'72.] Document No. 11. 383 

buy and sell according to instructions. I was appointed one 
of the committee to confer with Mr. Porter to see if he would 
undertake the business, telling the others at the same time, 
that I had no bonds and expected to have none, but as they 
desired that I should agree to the same tiling, in the event that 
I should purchase any, I consented. The next morning I saw 
Porter in company with some other gentlemen, whom I do not 
remember. Porter declined having anything to do with the 
matter after examining into it, and it fell through, as I regarded 
it. Afterwards, during that winter, Jones came to me and 
allleged that he had lost heavily in bulling the bonds, and 
insisted that I should pay a portion of the losses, which I 
declined to do, for the reasons already set forth. 

Q. Being in New York in the Summer and Fall of 1S69, 
will you state to the best of your knowledge and information 
how what are called margins were put up by these Pailroad 
Presidents, and other persons speculating in North Carolina 
bonds, and whether it was done in cash or with bonds in their 
possession ? 

A. I do not know positively, not having put up any myself 
nor having seen any of the brokers do so, but it was mv under- 
standing as it was the general impression, that these Presidents 
were putting up their own bonds as collaterals. 

Q. You have stated in your former examination that your 
accounts and Pickrell's were submitted to G. W. Grice, of 
Portsmouth, for examination. Did you not know at the time 
or have you not since been informed that Pickrell Sc Grice 
were partners, or intimately connected with each other in 
business relating to these Railroads '. 

A. I did not know it at the time, and do not know it now. 

Q. Did Mr. Grice make any objection to the heavy charges 
for commissions, &c, made in these accounts ? 

A. He agreed with me in the objection that they were very 
high ; I made the objection. 

WM. SLOAN. 



3S4 Doctmrnt No. 11. [Session 

Gen. R. F. Hoke appeared, was sworn and testified. 

Q. Do you know the property known as the Sulphur pro- 
perty, 6old by Wm. Sloan to John F. Pickrell, and what is 
your opinion and estimate of its value? 

A. I know it only from reputation, as to quantity of ore. As 
to quality I have no hesitation in Baying it is very rich in sul- 
phur, and that it has a high speculative value. The land itself 
T consider of no value whatever, agriculturally, and its whole 
value arises from the existence of the mine. I have been told 
that the quality of ore is considerable. Of course, the specula- 
tive value would arise from the quantity of ore to be mined and 
the cost of transportation in getting it to tide water. 

R. F. HOKE. 

Sworn to and subscribed before the commission. 



Raleigh, Sept. 6th, 1871. 

Mi:. J. T. Aldekmax appeared, was sworn and testified. 

Q. Can you give any further information in addition to your 
testimony before the Bragg Committee, in relation to the sale 
and disposition of the bonds of W. 0. & It. It. It. i 

A. 1 cannot. 

Q. Can you give any information in relation to the sale or dis- 
position of bonds of said company by Mr. Sloan, former presi- 
dent of the company I 

A. I cannot. I was simply acting as assistant Treasurer of 
the Eastern Division of the road. I paid out money to the or- 
der of the president and performed similar duties, but know 
nothing of the disposition of the bonds. 

Q. Have yon any information in reference to the accounts of 
John F. Pickrell, as returned by him to the company and cer- 
tified to be correct by Wm. Sloan former president 1 If so, 

tc all you know about them? 

A. I have seen a copy of the approved account of John F. 



1871-'72.] Document No. 11. 385 

Pickrell. The accounts were not left in my possession and I 
can <rive no definite account of them. 

Q. Do you know or have you any information that the 
officers ot the railroad company or any persons for tliem, pur- 
chased what were know as the anticipation bonds at less 
than their face value, and received from the company the face 
value ot such bonds ? If so give all the information you know 
on the subject ? 

A. I know that there have been some of these anticipation 
bonds paid at their face value, but none to any officer of the 
company. I know nothing of any officer of the company 
having speculated in the way intimated in the question, either 
directly or indirectly, though I have heard rumors of its hav- 
ing been done. Some of these bonds Avere paid off by me at 
their face value, and some at less, according to circumstances. 
The amounts paid were adjusted by the President of the com- 
pany. 

Q. Do you know what X. C. bonds were worth in New- 
York in July, 1869 ? 
A. I do not. 

Q. Were all the coupons attached to the one million of 
bonds received by you as agent for the President of the road 
on the 1st. of January, 1869? 
A. My impression is they were. 

Q. In the account of sale of N. C. bonds on account of R. 
II. Cowan, President of the road, returned by him to the Bragg,- 
committee, is the following entry : " To 970 bonds, coupons 
45, $43,650." Please explain this charge, why these coupons 
were charged against the road, and what disposition was made 
of them I 

A. I don't think I can give any information upon the sub- 
ect. 

Q. Do you know any thing of any money or other thing- 
having been paid to any one to procure the passage of any 
bill through the Legislature: 
A. 1 do not. 

25 



38(> Document No. 11. [Session 

Q. Do you know what disposition has been made of the o(> 
bonds not accounted for in Col. Cowan's report to the Govern 
or and the Bragg committee ? 

A. I have heard it stated that they had been paid to certain 
lawyers for arguing the cause known as the University Rail- 
road suit before the Supreme Court. This statement was 
made to me by one of a committee appointed to settle the 
matter with Soutter & Co. 

J. T. ALDERMAN. 

Sworn to and subscribed before the Commission. 



Raleigh, Sept. 7th, 1871. 

Mr. M. Cronly appeared, was sworn and testified. 

Q. What position do you now occupy on the W. C. 6c R. 
R. R. i 

A. I am president of the company, and have been since 
July 5th, 1871, and director since Oct. 20th, Wo. 

Q. Will you please look in the copies of agreement and ac- 
counts of Pickrell Sz Co., furnished the committee, and say it 
they are correct to the best of your knowledge? 

A. They are correct, they were copied in my office. 

Q. Did }*ou have an}' conversation with Dr. Sloan on or 
about the 20th of Oct. 1870, in reference to PickreH's account ( 
Jf so state all that was said by him on the subject at that time. 

A. At the meeting of the stockholders held in Wilmington 
Oct. 20th 1^7". II. M. Houston, Jasper Stowe, R. L. Steele, 
F. W. Kerchner and myself were appointed a committee to 
whom was referred the report <~>t the president and dire. tor,--. 
Upon examination of the same we sent for and obtained an in- 
terview with Dr. Win. Sloan, president of the company, who 

ted to us most positively that the entire amount due by his 
company to John F. Pickrell of New York was $397, 815.46, 



1871-'72.] Document No. 11. 38T 

and that he had obtained the said loan upon a rate of interest 
ol 7 per cent, with no commissions or additional charges, and 
that John F. Pickrell had paid the interest due July, 1870, 
amounting to $56,000, which amount was likewise due him, 
said coupons being cancelled in the hands of John F. Pickrell, 
subject to his (Sloan's) order. 

Q. It appears by Pickrell's account of sale that the special 
tax and first mortgage bonds were sold on the 26th of Nov. 
1870. Did you, or the present board ot directors, receive any 
notice from him previous to the sale, according to the articles 
of agreement ? 

A. We did not. 

Q. Do you know what the value of those first mortgage 
bonds was in New York, at, or previous to, that time ? 

A. I have never heard of their being sold previous to that 
time at less than 70 per cent. 

Q. Do you know what amount was paid by your company, 
if anything, in the suit known as the University railroad suit % 

A. From the accounts of the company and from information 
derived from other sources, it appears that $8,250 was paid in 
cash, and $30,000 in N. C. bonds for the proportion of this 
company for legal services in said suit. This amount was 
paid to the attorneys who were employed in that suit. 

Q. Do you know anything about the officers of the company 
speculating in what were known as the anticipation bonds? 

A. Nothing ot my own knowledge. 

Q. Are you familiar with the money market in New York, 
and do you regard the amount paid by Sloan for commissions 
and interest as very high, or at a reasonable rate ? 

A. The amount of charges is exorbitant. This company has 
negotiated loans since October, 1870, at the rate of 9 per cent, 
per annum ; no commission or other charges. I have been 
familiar with the money market of New York, for a number 
ot years, and have never known such charges as were paid by 
Sloan, paid by any one else, and have never known money 



38$ Docvmknt No. 11. [Session 

borrowed even tor ;i short period at rates more than one per 
eent. a month, which includes all charges. 

M. CRONLY. 
Sworn to and subscribed before the commission. 

Col S. L. Fremont appeard, was .-worn and testified. 

C>. What position do yog occupy ou the W. C, & K. \l. 1!.: 

A. T am Chief Engineer of the company, and also its general 
superintendent. T Mas appointed on the 20th of Oct, 1-7". 

Q. (Jive the committee such information as yon can as to 
certain contracts for grading Arc. made with Messrs. Harvey 
and Sumner '. 

Q. I have never seen Harvey's contract. I only know the 
prices from what he told me himself and from other sour 
I saw the contract made with B. II. Sumner, signed by himself 
and Ti. II. Cowan, which Was for building the read from Cher- 
ryville to Rutherfordton, via Shelby, a distance ot 36 miles. 
The contract was for the whole building, with the exception of 
the iron and perhaps the bridges. The contract was dated in 
1 s *'>7 or L869. The prices appeared to me to be very high con- 
sidering the time ai which the work was to be done and the 
cost of labor and supplies. To the best of my reccollection the 
excavation and embankment was over 20 cents a van] each way, 
or over 40 cents a vard as is custoraarVi now counted one way. 
Similar work is now being done on the air line road, running 
parallel with this one tor some distance, I mean the road from 
Charlotte to Atlanta, as I was assured by their principal Engi- 
neer at 24 cents a yard, reckoned oneway. I further recollect 

that rock excavation was paid for at the rate of £•"> per cubic 
yard, which is now being done on the air line at si. This is 

the substance of what I recollect as to prices. I think the rates 
with Harvey were .-lightly less, but I only knew particulars 
from report and sources stated above. These contracts should 
be in my possession as the present Chief Engineer of the com- 
pany, but were taken away by Mr. Guion former Chief Engi- 
neer, and I have never been able to obtain them. I have been 



1871-'72.] Document No. 11. 380 

informed that they were so taken away. The copy that was 
shown me was in the possession ot Mr. Sumner and shown me 
bv him. 

Q. Do you know whether any ot the officers of the company 
were interested in these contracts '. 

A. I only know postively of one officer. Mr. McBee, Treas- 
urer, told me that he was interested in contract. Mr. Sumner, 
I believe, was director when he made the contract, and was 
afterwards re-elected. Another director, Mr. Holmesly had a 
contract for building the warehouse at Shelby, at exorbitant 
prices, at least 33 per cent, above what the work could have 
been done for. The prices I learned irono Mr. Holmesly and 
others, in Shelby, and the work I saw. and ascertained then 
the prices of labor and material. I will add, in more fully 
answering this question, that Mr. B. S. Guion, then Engineer 
and Superintendent of the Western Division was interested in 
the contract with Sumner, as I have been repeatedly informed; 
that on becoming Chief Engineer of the company, he transfer- 
red his interest to the Messrs. Motz of Lincolnton. All this is 
a matter of common report, and universal belief along the line 
ot the road. 

S. L. FREMONT. 

Sworn and subscribed before W. M. Shipp, Chairman. 



Raleigh, is. C, Sept. 27th, 1S71. 

John G. Justice was sworn and questioned as follows : 

Q. State what was your connection with the W. C. & K. 
Railroad Company in the years lSG'J and 1870 I 

A. I was a station agent at Lincolnton. 

Q. Did you purchase in the summer of 1869-"70, a number 
of bonds known as anticipation bends, issued by the W. C. & 
It. It. Company \ If so, state it any of the officers of said 



390 Document No. 11. [Session 

Company were interested with you in the purchase and sale of 
any of said bonds ? 

A. I did purchase a number of said bonds, partly on account 
of M. P. Pegram, of Charlotte, and myself and partly on my 
own account and on account of no other parties, and no officer 
of the road was interested with me in any way. "We bought 
them at about an average of fifty cents in the dollar on their 
face value, and sold them for 75 or 80 cents in the dollar ; part 
were sold by Mr. Pegram to parties unknown to me The ma- 
jority of those sold by me were sold to J. G. Burr, banker in 
Wilmington, R. Y. McAden, and a lot was sold to G. W. 
Swepson by Dewey & Co. for me. 

Q. "Were any of the bonds bought by you sold to any officer 
of the Company or paid to you by either of the Treasurers of 
the Company ? 

A. None were sold by me to any officer of the companv. 
One lot of about 1,200 or 1,500 dollars was paid by the Treas- 
urer of the Western Division of the W. C. & R. R. R. Co., 
upon the written order of Col. Cowan the President of the com- 
pany ; this was at the time that the bonds were being generally 
redeemed by the company on notice to the parties holding 
them. They were paid according to a rule established by the 
company to a certain date, which left the bonds without in- 
terest for about one year. I was never allowed any access to 
the books of the company to find out who owned these bonds ; 
on the contrary it was expressly refused. 

Q. Was the notice given a general notice to all the owners 
of the bonds? 

A. As I recollect, the notice was not published in the news- 
papers. Special notice, as I think, was given to the original 
owners and it was understood they were to be first paid. 

Q. Do you know, or have you heard, that any of the officers 
of said company were engaged in speculating in these bonds ? 

A. I do not know of any officer speculating in .said bonds. 
I bought, or rather paid for one bond, for B. T. Guion, super- 
intendent of the road ; what he did with it I do not know. I 



1871-72.] Document No. 11. 391 

have beard, but only from general rumor, tbat tbe officers of 
tbe company were speculating in these bonds, whicb rumor 
I believe to be untrue. 

Q. State what you know or have beard of a contract be- 
tween the ~W. C. & R. R. R. Company and B. H. Sumner for 
finishing the road from Cherryville to Rutherfordton. 

A. I know Sumner had such a contract and that it was 
given to him upon the same terms as that made with Mr. 
Harvey on the Eastern Division a year previous. There was 
an understanding between Mr. Sumner and Mr. B. S. Guion, 
that in case Mr. Guion was not re-elected superintendent on 
the reorganization of the company, he, Guion, was to have an 
interest of two ninths in this contract. Upon the reorganiza- 
tion he was elected superintendent and then sold his interest 
to W. H. Motz, C. Motz and myself for the sum of $2,500, 
saying he could not hold an interest and be superintendent 
at the same time, with the understanding that if the profits 
of the contract exceeded ten thousand dollars, some addition- 
al sum should be paid Guion. The sum I do not recollect. 
The parties interested in the other seven-ninths of this con- 
tract were B. H. Sumner two-ninths, V. A. McBee two-ninths 
and Jasper Stowe three-ninths. I do not know how much 
has been paid on this contract, but there is a balance due by 
the railroad company of three or four thousand dollars for the 
work which has been done. 

Q. Had Wm. Sloan any interest in this contract ? 

A. None to my knowledge, and I believe none, because 
the railroad company is still indebted to the contractors and 
I think Sloan would have paid it had he had any interest. In 
regard to the anticipation bonds I wish to say that Col. 
Cowan refused to take them for himseli or the company at 
75 cents in the dollar. 

JNO. G. JUSTICE. 

Subscribed and sworn to before the commission this Sep- 
tember 27th, 1871. 



392 Document No. 11. [Session 

Raleigh, Sept. Oth, 1871. 

Mr. T. W. Dewey appeared, was sworn, and testified : 

Q. Who composed the firm of T. W. Dewey & Co. in the 
years 1868^69 I 

A. Gen. W. Swepson, S. McD. Tate and T. W. Dewey. I 
think the linn dissolved in the fall of 1869. 

Q. Was this firm of T. W. Dewey & Co. en -aged in specu- 
lating; in X. C. State bonds in the summer and fall of L869, and 
was it done with the knowledge and consent of Messrs. Swep- 
son and Tate? If so. will you please give the Commission 
such imformation as you may hi lativo to tl -t of 

inquiry ? 

A. In the summer of 1869, about the 4th of July, Mr, 
Swepson telegraphed Mr. McAden and myself to come on to 
N w York. We did so, and met him there. He then advised 
ns to buy N. C. State bonds on speculation. A pool wasform- 
ed composed of Swepson, McAden and Dewey & Co. They 
' p to How. & Macy to buy $100,000 N. C. state 
bonds. Mr. S' \ son then told me he would furnish the bonds 
to fill the • I got $100,OoO in bonds from Mr. Swepson, 

and carried them to Howes and Macy, and they took them to 
fill the order which I had given them. They gave me a check 
for them at about 43 cents in the dollar, which I paid over to 
Mr. Swepson. They were directed to hold the bonds until 
they reached 50 cents in the dollar, which they did, selling 
them afterwards a1 a net pr< fit of between 5 and 6,000 dollars. 
Of this profit Mr. McAden received one-third, T. W. Dewey 
& Co. one-third, and one-third which was then regard-das 
th< • !' <b W. Swepson. Mr. Swepson, however, declin- 

ed to i ■• his third after the firm of T. W. Dewey & Co. 
had 1< t "ii another transaction. Some time after this, it was 
published that the State would pay its interest on her bonds. 

Mr. McAden then pr< | I to me that we purchase another 
lot of bonds on speculation, being of opinion they would rise 
in price. [ assented, and we gave an order for the purchase 



1871-'72.] Document No. 11. 393 

of $300,000 of State bonds, on account of McAden, T. W. 
Dewey & Co., and G. W. Swepson. P. McD. Tate was also 
soon after admitted a partner in this speculation. The order 
was not filled. About $260,000 of bonds was bought, when 
the farther purchase was stopped by Mr. Tate. He became 
uneasy, and went out. The other partners held on a short 
time longer, when they sold out at a considerable loss. Dewey 
cc Co. and McAden furnished the margins for the first specu- 
lation, ad for that of the second speculation, except that on 
the part of Tate. I do not remember whether or not that 
was furnished by him or Soutter & Co. McAden and Dewey 
vfe Co. paid the losses on the second speculation, Swepson only 
paying his share of the profits of the first, and also giving up 
some other claims which he had in an individual settlement 
with the firm of T. W. Dewey & Co., when the firm was dis- 
solved. I have given all the information I have, of my own 
knowledge, of the bond transactions in New York at that 
time. 

Q. Did you purchase any of the anticipation bonds of the 
Wilmington, Charlotte & Rutherford Railroad Company? If 
so, will you please state, generally, at what prices you bought 
and if any of the officers of that road were interested in such 
purchases, directly or indirectly? Will you also state what 
sums you obtained for them, and who paid you for them ? 

A. In the Summer of 1869 or '70, I received information 
that the Wilmington, Charlotte & Rutherford Railroad Com- 
pany (I do not remember from whom I got the information, 
but I think from parties connected with the road,) would pay 
the principal and interest of the anticipation bonds. I then 
bought, as banker in Charlotte, a number of these bonds from 
G. W. Swepson, at a considerable discount. I then employed 
Mr. II. W. Guion, as attorney of the bank, to collect the notes 
for me. He collected the notes, or made some arrangement 
with the Treasurer of the Company, by which I received the 
principal and interest, after paying Mr. Guion his commissions, 
which, I think, were about 10 per cent. 



394 Document No. 11. [Session 

I purchased another lot through Mr. Gricr, of Charlotte. 
1 do not recollect the prices, hut they Mere at high rates, as it 
was late in the operation, and there was considerable activity 
in these bonds. These bonds were collected from the Treas- 
urer in the same way as the others. . I had another transaction 
with Mr. Benj. Guion, who sent parties to me, who had these 
bonds for sale. I purchased bonds from them at a discount, 
and collected the principal and interest, dividing the profits 
with Mr. B. S. Guion. These are all the transactions that J 
now remember in these bonds. It was understood between 
me and Mr. II. "W. Guion, before I made these purchases, that 
he was to collect them at 10 per cent. 

I know of no other instances of officers in the road being 
interested in these bond transactions, except from rumor. 

Q. What connection did II. W. Guion and M. B. S. Guion 
have with the road at the time you speak of? 

A. Mr. II. W. Guion was director and Mr. B. S. Guion 
was superintendent 

A. Do you know of any money, bonds, proceeds of bonds, 
or anything of value, havtng been given to, or received by any 
member of the Legislature, or any State officer, to influence 
their official action, or in procuring the passage of any act 
through the Legislature '. 

A. I do not. I was interested in the passage of a private 
act authorizing the bank of Mecklenburg. The bill had passed 
both houses. It was the day before the adjournment of the 
Legislature. There was a great pressure upon the clerks, 
and I found that my bill would not be enrolled in time to have 
it duly ratified. For the purpose of expediting the enrollment 
I paid the clerk. Mr. McDonald. After it was ratified, I was 
anxious to get a certified copy before I left the city, and 1 paid 
a subordinate in the Secretary of State's office to hurry me a 
copy. I paid both, and all others who I may not now remem- 
ber, not over s7f). McDonald may have employed extra clerks 
to do my work ; 1 do not know how this is. I paid no member 
of the Legislature anything, nor do I know that any other per- 



1871-72.] Document No. 11. 395 

son did on any account ; nor do I know that any other officer 
of the State was paid or received pay. The statements that I 
have made in this testimony have been made without reference 
to my books, or to any memoranda, and I ask leave to correct 
any portion of it, should I find it. necessary at any time here- 
after. 

THO. W. DEWEY. 
Sworn to and subscribed bofore the Commission. 



Afternoon, Sept. 12th, 1871. 

Mr. Gr. Z. French appeared, was sworn, and testified : 

Q. Were you a member of the Legislature of 1868-'69 ? 

A. I was, taking my seat at the winter session ot that Leg- 
islature. 

Q. Do you know of money, bonds, proceeds of bonds, or 
any thing of value being given, offered or loaned to any mem- 
ber of the Legislature, or to any State officer, to influence his 
action in procuring the passage of any act making appropria- 
tions to Railroads, or for other purposes, through the Legis- 
lature? Or have you any information on the subject? 

A. I have no personal knowledge of any thing of the kind, 
and nothing except from common rumor. 

Q. Do you know of any agreement or understanding between 
the Presidents of the various railroads and Littlefield, or other 
parties, by which he or they were to receive a certan com- 
pensation for any advocacy in getting bills making appropria- 
tions to railroads through the Legi suture ? 

A. Of my own knowledge, I do not. I heard rumors of 
such transactions. 

Q. Can you give the history of the passage ot the bill 
amending the charter of the W. C. & R. R. R., and will you 
state whether any money, bonds, or other thing was used to 
procure the passage of this bill ? 



396 Document No. 11. [Session 

A. I was a leading advocate of the passage of the bill, and 
had charge of it. It was prepared by Col. R. IT. Cowan and 
Hon. S. J. Person as it was understood, and after defeating 
the proposition to divide the road, the bill was put into the 
general omnibus of railroad bills and passed. I do not know 
of any money or other thing being used to procure the passage 
of the bill. 

Q. Did you not vote for the appropriation to all these rail- 
road bills, which passed through the Legislature at that 
session, and did you receive any compensation in any way for 
your advocacy of such lulls. Or do you know of any one else 
who did receive such compensation in the wav of money, 
bonds, loans or otherwise? 

A. I think I voted for all of them, bu1 I received no com- 
pensation, nor do I know of any one else, to my own knowl- 
edge, having done so. 

Q. Do you know anything about the payment of I 
known as anticipation bonds, of the W. C. & R. R., or how 
the million of dollars appropriated by the state was expended? 
A. I do not. 

Q. Did you not receive- from G. W. Swepson on the 17th 
of February, 1869, or thereabouts. $500 in cash, or its equiva- 
lent; June 17th, 1869, the sum of $10,456.87, and the same 
date a like sum oi $10,456.87? If so, state how this money 
was paid, and the consideration therefor \ And will you also 
state any other sums that you received from Swepson or Lit- 

tlefield \ 

A. I borrowed on or aboul the 17th of February, $600 from 
Swepson, lor whichlgave my note or due hill. The same 
day he negotiated for me in New York a loan of $10,456.87 

on a draft signed by me and accepted by L. G. Estes, and en- 
dorsed by himself, and drawn at four months, which was dis- 

at one per cent, per month. A draft for like amount 
running same time and of sr.me date, was drawn by L. G. 
accepted by me, and endorsed by Sweps >n, was nego- 
tiated in like manner, and on the same rate of interest. Be- 



1871-'72.] Document No. 11. 397 

fore these drafts matured, I wrote Mr. Swepson, asking his 
assistance to lenew them, being unable at that time to pay 
them. I made new drafts to cover them, with discount at 
same rate, and gave them to General Estes, who was to see 
Mr. Swepson. General Estes informed me that Swepson 
said to him, " Never mind about renewing, let the same paper 
lie, and pay them in the fall." On the 30th of July following 
the maturity of this paper, a suit in bankruptcy was institu- 
ted against me by New York creditors, preventing my own 
action in the premises, but have been informed by Gen. Lit- 
tlefield, that he had taken up this paper, and charged my 
share to me. He took up both drafts. I have had a running 
account with Gen. Littlefield for the past three years and a 
half, on account of speculation in old N. C. bonds in New 
York city. 

Q. Did Littlefield take up these papers at your request, or 
voluntarily, and do you know anything of the arrangemens 
between Littlefield and Swepson in regard to these drafts and 
the payment of the $500? 

A. Littlefield informed me that he had agreed with Swep- 
son to take them as cash, and I acquiesced. 

Q. Did you have any transaction in special tax bonds, in the 
year I860 ! 

A. I did not, nor did I ever have any interest in such 
bonds. 

Q. Who were concerned with you in the speculation in old 
N* C. bonds, as stated ? 

A. Gen. Littlefield, Gen. Abbott, Gen. Estes, and three 
gentlemen residents ot the Ftate of New York. 

Q. Who was the acting manager in the purchase and sale of 
these old N. C. bonds \ 

A. Littlefield, and the three northern gentlemen above 
spoken of. 

Q. Did you ever have any other transactions in these bonds 
besides those connected with Littlefield '. 

A. I had several. 



308 Doctjtent No. 11. [Session 

Q. "When did you enter into this arrangement with Little- 
field to speculate in N. C. bonds, and how long did it continue? 

A. Early in the year I8G8, I think in January, I cannot say 
the precise time it ended, but I think in the spring of 1869. 

Q. tor what purpose did you borrow these sums upon the 
draits above spoken of? 

A. Partly for my regular business, and partly for purposes 
of speculation. 

Q. Do you know anything of the item (in the account filed 
by G. W. Swcpson) §25,000, paid to F. W. Foster, the mem- 
ber from Bladen ? 

A. I know that Foster had a note of Littleiield's of $25,000 
or thereabouts which I endorsed or guaranteed for a consider- 
ation. 

Q. Did you get any part of the $25,000 paid to Foster \ 

A. Only what I was to receive as a consideration for the 
endorsement. 

Q. Flease state how much that was ? 

A. I received $7,<>00 as near as I can recollect. 

Q. Have you ever had any settlement with Littlcfielu in 
regard to these speculations in old N. C. Bonds i 

A. I have not. 

Q. Do you know what was the consideration of the note 
eiven to Foster, and what is vour information on the subject ! 

A. Of my own knowledge, I know nothing. 

Q. Do you know the fact that he was associated with Little- 
field or Swepson or any others in pressing these railroad bills 
through the Legislature I 

A. IK: was an active friend of railroad bills, but I cannot sav 
that he was associated with any of these men. 

(j. Who was the chairman of the committee on Internal Im 
provement.- '. 

A. Byron Laflin. 

Q. Do you remember anything of draft.-, on Littleiield, one 
lor $2,851.12, the other for $1,500 dated Jan. 0th and 21s1 
1869. 



1871-72.] Document No. 11. 39i» 

A. My name was on some draft, connected with the old 
bond transactions previously mentioned, but I cannot state 
definitely in relation to these items. 

GEO. Z. FRENCH. 

Subscribed and sworn to before the commissioners. 



Nov. 29th, 1871. 
Mr. French came before the commission again this day and 
asked leave to add to his former deposition, the following : That 
the note guaranteed for Foster had evidently been in Foster's 
possession a long time before he (Mr. F.) was aware of its ex- 
istence. The bargain between Mr. French, Littlefield and 
others, in connection with old North Carolinu bonds was made 
in Dec. 1867, instead of 1868 as stated in former testimony. 

GEO. Z. FRENCH. 



September 28th, 1871. 

Col. R. H. Cowan appeared, was sworn and testified. 

Q. Do you know, or have you heard of any money, bonds, 
proceeds of b<mds, or any thing of value being given, offered 
or loaned to any member of the convention or of the Legisla- 
ture or to any State official, or to any railroad officer in which 
the State has an interest, to influence his official conduct, or foT 
any other purpose. 

A. I do not know of my own knowledge. I have heard gen- 
eral rumors of such things. 

Q. Have you information or knowledge of any understand- 
ing or agreement between Gen. Littlefield, either for himself 



"O 



or in connection with others, and anj> one or more of the Pres- 
idents or officers of the several railroad companies of the State, 
whereby the said Littlefield, or any other person, was to re- 



400 Document No. 11. [Session 

ceivu compensation fur his or their services in procuring the 
passage of bills through the Legislature or Convention; 1 If so, 
state it fully. 

A. I have no knowledge of any understanding or agreement 
whatever with Littlefield or any other person. It cost the W. 
C. & II. It., of which I was the President, sG,500 to procure 
the passage of a bill for the benefit of the company through 
the convention. That sum was paid by Soutter A: Co., and 
charged in their accounts against the company, 'and allowed to 
me, but to whom it was paid, or for what it was paid beyond 
the expenses, which were wry heavy at that time of the dele- 
gation here, I am unable to say. But I had the assurance, 
and verily believed that none of it was paid to the members of 
the convention, or for purposes of bribery. 

Q. Do you'recolleet of the conversation having taken place 
in the room of Gen. Abbott in the Yarborough House during 
the pendency of the ordinance spoken of above before the con- 
vention, when you, Gen. Abbott, Mr. Porter, of the firm of 
Soutter & Co., and Deweese are said to have been present, in 
which Deweese said the bill could nut pass without he was 
paid, and demanded $7,000 \ W so, state it full v. 

Q. I do not. I heard Mr. Deweese say on one occasion that 
the bill could not pass, but I never heard him demand money 
to be paid to him or any other person as a condition for its 
passage. I heard froinfothers that Mr. Deweese had deman- 
ded money, but no money was ever paid to him, so far as I 
know or believe, in this connection. 

Q. Do you know anything of the passage ot the lull through 
the Legislature, making the appropriation of $4,000,000 to the 
Wtlmington, Charlotte & Kutherford Railroad I If so, state 
the circumstances particularly. 

A. When the suggestion was first made of passing such a 
bill through the Legislature, the directors, at least all with 
whom I consulted— and 1 certainly consulted with a majority of 
them— were opposed to any such measure, and determined not 
to come to Raleigh, or to have anything to do with it. Soon 



1871-'72.] Document No. 11. 401 

afterwards a bill having passed the Senate to divide the road 
into the Eastern and Western Division as distinct corporations, 
the directors, thinking that that measure would destroy the 
value of the mortgage and prevent the sale of the bonds, either 
in meeting or bv agreement on the street, sent a delegation to 
Raleigh, of which I and Judge Person were members to 
oppose its passage. When we reachad Raleigh, we found the 
Legislature determined to pass some bill which would take 
the road from the management of the then administration and 
put it into the hands of the Republican party. I told them 
while they held one end of the rope, we held the other; that 
it required a majority of the stockholders to accept amend- 
ments to the charter, and that we could prevent the acceptance 
of any bill they might pass, if it was not agreeable to the 
stockholders. I told them further that we were opposed to 
the passage' of any bill making appropriations, and that if we 
were in the Legislature we would vote against all such bills, for 
the State was in no condition to engage in such measures ; but 
finding that some bill would pass, Judge Person and I drew 
up a memorandum of such a bill as might be acceptable to the 
stockholders, our purpose being to protect the company as far 
as possible. A bill was drawn up in accordance with the 
memorandum, but was materially altered before its passage, 
either before or after its introduction. It was accepted by the 
stockholders and the company reorganized. I do not know 
that any money was paid for the passage of this bill, nor do I 
think any was paid, the compensation being the control of the 
road which it gave them. The report that 10 per cent, was 
paid to Littlefield or others, is untrue as far as our road is con- 
cerned, at least under my administration. 

Q. State anything you may know in addition to what yon 
stated before the Bragg Committee, and in your report to Gov. 
II olden, of March 4th, 1870, in connection with the issue of 
bonds to your road, or to any other road, and the disposition 
of such bonds. 

A. I know nothing of the disposition ot any bonds, except 
2G 



402 Document No. 11. [Session 

those issued to me. My account to the Bragg Committee con- 
tains a full account of the sale of all the bonds which came into 
my hands, and of the manner in which the proceeds were 
applied, except the 30 bonds there mentioned as in the hands 
of Soutter & Co., and I know nothing in addition thereto, ex- 
cept as to the 30 bonds, which I will now explain. I received 
a thousand special tax bonds from the State of North Carolina, 
which I placed in the hands of Soutter & Co., as our agent, for 
sale. "When Dr. Sloan succeded me in the office of President, 
I was allowed, by resolution of the stockholders, until the 
regular annual meeting to settle this bond account. On the 
20th of July, I turned over all other books, papers, &c, to Dr. 
Sloan. Soutter & Co., stood charged at that time on the books 
of the company with one thousand bonds. Somewhere about 
the latter part of September, I received account of sales from 
Soutter & Co., of 070 bonds. Entering these account sales on 
the books of the company, it left them credited with 30 bonds 
of the State of North Carolina, and $7,250 in cash. About 
the same time I received a private letter containing the general 
statement that these bonds had been expended in the inter 
of the company, in the University Railroad i se, and referring 
me to Judge Person, the attorney of the company, for infor- 
mation. Judge Person was al (hat time absent from Wilming- 
ton. On his return he made no stay in Wilmington, but 
passed on to Columbus court. I saw him tor a few moment.-, 
stated the, above facts to him, and arranged for an interview on 
his return from Columbus. When he did return, he was im- 
mediately engaged in the ease of the I". S. againsl the steamer 
Cuba. His whole time was occupied in that case, and during 
it.- progress ho died. So T had no farther interview with him 
and obtained from him no further information. I immediately 
wrote to Messrs. Soutter & Co., stating this fact, informing 
them that they stood charged with thirty bonds, and with the 
amount of money a 1 ove stated, on the books of the company, 
refusing to allow the account on the information T had and 
g a detailed statement ol the transaction to be sub- 



1871-'72.] Document No. 11. 403 

mitted to the then existing board of directors, for I had previ- 
ously reported to the stockholders that this amount of money 
and these bonds were on hand. Matters stood in this way 
until I was summoned before the Bragg committee. I had 
made no further effort to settle with Soutter & Co., supposing 
that all authority in the matter had passed into the hands of 
my successor. But I was informed that I would be required to 
aecount to the Bragg committee for the whole thousand bonds 
I had received from the state, and I wrote again to New York 
asking for the details of the transaction. In reply, I was 
informed that Mr. Porter was absent in Alabama ; that he was 
the only member of the firm who knew any thing about it ; 
that he would furnish the details on his return, and that in the 
meantime I must return them as in the hands of Soutter & 
Co., to be accounted for. I did so return them. I afterwards 
received a letter from Mr. Porter, dated May 31, 1870, giving 
me the first detailed account I had ever received of the trans- 
action. It stated that these bonds and this money, by virtue 
of a contract made with the former attorney of the company 
had been paid out as the proposition of the cost of establishing 
the validity of the special tax bonds due by our company ; that 
they were paid to Messrs. Fowle & Haywood, and Person as 
fees for arguing the University Bailroad case, and that these 
heavy fees hnd been charged because of the large amount 
involved in the case, and because they were contingent entirely 
upon success. I refused to allow the account myself, because I 
thought the fees exhorbitant, because I thought the amount 
assigned to our company was more than its just proportion, 
and because I had been out of office for ten months, and had 
no authority in the matter. But I submitted a verbal state- 
ment of the matters to the board of directors at their next 
meeting, and by request of Mr. Porter, asked for the appoint- 
ment of a committee to settle the accounts with the firm of 
Soutter & Co. The committee was appointed, but did not have 
an opportunity to conclude anything, before the new board of 
directors came into office, submitting the same statement to the 



404 Document No. 11. [Session 

new board. I had a committee appointed who had an in- 
terview with Messrs. Sonlter & Co., and reported to the hoard. 
I understand that this new board has refused to allow the 
account, and have demande 1 the money and the bonds from 
Messrs. Soutter tfc Co. I understand, also, that Messrs. Soutter 
& Co. have refused to pay them over upon the ground that 
they acted by the advice and by the authority of the regular 
attorney of the company. Bat of this I know nothing. 
.Messrs. Soutter & Co. were the financial agents of the com- 
pany during the whole time I had the management of its 
affairs. I believe them to have been entirely faithful to their 
trust. In man}* instances they were exceedingly liberal to the 
company, and they certainly took more trouble to acquaint 
themselves with the history and condition of the company, so 
as to know the condition and value of i' s securities and estab 
lish them in the market, than is the case withagents generally. 
I believed they acted in this matter with the honest conviction 
that it was for the interest of the company. But under the 
charter and by-laws, neither they nor the attorney had the 
right to make the contract which they made on the part of the 
company, and they were certainly in error in not communica- 
ting the whole transaction to the proper officers at the proper 
time. 

Q. State what further connection, if any, your road had 
with the University Railroad suit, and what further sums, it 
any, were paid on that account, and did you act in concert 
with the officer of any other railroad company in that con- 
nection 3 

A. We had made a sale of our bonds in Xew York condi- 
tional upon their being placed upon the stuck list. As soon as 
we ascertained that they had been bo placed, II. W. Guion, S. 
J. Person and myseli were appointed a committee to go to 
New York to complete the sale, and to settle up all the com- 
pany's business matter.- then open in New York. Upon our 
arrival in New York, on the 4th day of July, Messrs. Soutter 
& Co. informed as that they had a telegram from Raleigh, 



1871-72.] Document No. 11. 405 

stating that the supreme court had agreed upon an opinion, 
and that the opinion had been filed, that all the special tax 
bonds were unconstitutional. I was astounded at, and doubted 
the information, because I did not think that the question of 
the validity of the special tax bonds, except those granted 
to the University Railroad Company, was involved in that 
case. They assured me however, that the information was 
lettable, and that the opinion, as written out, had been seen by 
gentlemen whose names they did not mention, nor do I know 
from whom they received the intelligence. Upon consultation, 
the committee determined to telegraph to Judge Fowle to get 
the case re-opened, that Judge Person might be heard in behalf 
of our company, and it was determined that Judge Person 
should return immediatelv to North Carolina to argue the case 
provided it was re-opened. The next day I think it was, we 
received information from Raleigh that the case was re-opened 
and Judge Person left that night for Raleigh. Previous to his 
leaving, Judge Person and I were in the office of Soutter & 
Co., when Mr. Porter informed me that Judge Person 
demanded s5,000 tor returning to North Carolina to argue the 
case and asked if I would pay it. I replied, " Judge Person is 
the salaried attorney of our company. I do not however think 
that the salary is entitled to cover extra services like these. I 
will pay Judge Person, however, whatever he will give me 
a cash voucher for/' Judge P. stated in answer to this, that he 
did not expect this foe to be paid by the company, but by those 
gentlemen in Xcw York, who, as stated by Mr. Porter, were 
largely interested in the case. Mr. Porter had previously 
stated that such large amounts had been advanced upon these 
bonds by different houses in Xew York, that they would eb 
reduced to failure if such decision was made hy the supreme 
court, at that time. I paid Jadge Person, then, .$1,000, on 
behalf of the company, and took his receipt therefor. After 
Judge Person left, Mr. Guion and I determined that it would 
be criminal to attempt to sell the bonds with the knowledge 
we possessed, and that we would subject ourselves to punish- 



4"»i Document No. 11. [Session 

incut under the laws of New York, and wo therefore came 
home without doiDg any thing farther. I had no consultation 
with any other railroad president in Xew York, or with the 
agent of any railroad, and we made no agreement for the joint 
defence of our interest in the said suit, hut acted upon our own 
responsibility and solely for the interest of our own company. 
After my return to "Wilmington I knew that several railroad 
companies were represented in the suit in Raleigh, hut I knew 
nothing of the contract of which I have spoken until I was 
informed, as above stated, and I am not responsible for it in 
any way. It was made while I was president of the road, but 
I was turned out of office the following week, was out of office 
for two months before I had any intimation of it, and for ten 
months before I had any explanation of its details. 

A copy of Mr. Porter's statement will be furnished if 
required by the commission. 

Q. State why the $200,000 of bonds were sold on the 18th 
of Jul}' at 43 cents, and what cause had produced the fall '. 

A. I was not in New York when the bonds were sold. I 
did not know they were sold till I received thu account dated 
Sept. Kith. They were sold to meet payments the company 
had to make about that time ami the prices were depressed by 
anticipations of the probable decision of the court in the Uni- 
versity case. The actual decision was made in that case on the 
21st of July. Excepting those 200 bonds, all of my special tax 
bonds were sold at prices ranging irom 50 to 55^ ; including 
those bonds, they sold at an average of about 50 cents ; deduct- 
ing the 6hort coupons, they netted the company about 45 or4G 
cents. They were sold as high a.- any of the same class of bonds 
were sold by anybody, and higher than the most. Nobody 
sold this special class bond.-- higher than I did, and in my opin- 
ion, none so largo an amount as high. " The bonds of which 
Gov. I!' Iden speaks in hi.- message to the Legislature, March 
14th 1870, as having .been sold at from 50 to 00 cents were 
bonds of a prior date, having all the coupons attached to them, 
and not liable to any deduction, and they were sold before my 



1871-'72.] Document No. 11. 407 

bonds, to which he compares them had issued ; and it is well 
known that when that large amount of special tax bonds were 
issued the prices were depressed thereby. I also sold bonds at 
a prior date at an average of 65 cents on the dollar, and includ- 
ing the amount received for interest, at an average of over 70 
cents, which my accounts as returned to the Bragg committee 
will show. A bond to be a good delivery on the stock board 
is required to have the coupons attached, maturing the 1st 
day of Jan. 1869, that is to say, the bonds should bear interest 
from the 1st of July 186S. If any of those coupons are detached 
from the bond, it is deducted from the prices agreed on at its 
face value. Our bonds were dated April 1st, 1869 ; they were 
therefore short nine months interest, and 4| per cent, on the par 
value of the bond was deducted from the price at which they 
w T ere sold. This accounts for the charge of 45 dollars each on 
990 bonds as reported to the Bragg committee making the sum 
of $42,650. 

Q. Explain fully, as far as you know, the contract made with 
B. H. Sumner, for building the road from Cherry ville to Buth- 
erfordton, and give the names of the parties to that contract as 
for as you know. 

A. The contract was made with Mr. Sumner by order of 
the Board of Directors. B. IT. Sumner is the only party named 
in the contract, to the best of my recollection. I do not know 
who his associates were, but it was c;enerallv understood that 
there were others connected with him. My Sumner waa not a 
director of the company at the time the contract was made, but 
was afterwards elected a director by the stockholders. 1 do not 
know who his associates were, but it was generally understood 
that there were others connected with him. I do remem- 
ber that the prices were pretty high, because it was 
agreed upon before the passage of the bill by the Legisla- 
ture of lS68-'69, the State had no interest in the road at the 
time. The company had no funds, and it was generally under 
stood that the contractor was running a very great risk. The 
prices were necessarily higher at that time than at the present, 



408 Document No. 11. [Session 

because of the greater depreciation of the currency and the 
very high price of provisions. I can furnish the committee with 
a copy of the contract, it they desire. 

Q. Did you, or any officer of the road have any interest in 
the contract ( 

A. I heard that Mr. B. S. Guion, Snp't. ot the Western 
Division was to have had an interest in the contract, meaning 
to resign his office, but being re-elected superintendent and ac- 
cepting the position, he promptly resigned his interest in the 
contract. I have never heard that any other officer was to have 
an interest. I had none myself, and have never had a dollar 
out of the company, or made a dollar from it, outside of what 
I have receiued as my .-alary as president. 

Q. Do you know of any officer of the company having spec- 
ulated in what are known as the " Anticipation bonds" of the 
company, by buying them at a reduced price, and then collect- 
ing them from the company at their par value, or very near 
it? Give the committee lull information with regard to these 
Anticipation bonds. 

A. I do not know that any officer or employee of the com- 
pany ever speculated in these bonds, with one single exci 
and that was in the case of a subordinate officer (Mr. J. G. 
Justice,) and for a very small amount, lie was advised that it 
would subject him to misrepresentation and ci nsure, and that he 
had better not buy any more. I never bought or sold one ot them 
in my lite. I never owned but one lot, and those 1 received from a 
contractor, who had worked them out on the road, in purchase 
ot a piece of property of which we had been the joint owner.-. 
I held them for years before I was paid for them, and I was 
paid for them precis* \\ ae I received them. There wasa great 
deal of .-peculation in these bonds. It acted injuriously for the 
interests of tl pany, and caused me a \ leal of embar- 

-ii.i nt. and I would gladly have stopped it if I could, but 
that was a matter beyond my control. [haveoftenl ' the 

original holders not to sell them on the market. They gen- 
erally found their way to the banks, who could compel us, and 



1871-'72.j Document No. It. 409 

frequently did compel us to take them up by new notes, because 
we could not do without bank accommodation, and we were 
obliged to protect our credit in those institutions. It was the 
policy of the company, and the earnest desire of the individual 
directors to pay them in full to the original holders of them. 
We felt that there was a high obligation upon us to do so, 
because they had done the work, and had waited a long time 
for their money. We did not feel this way when they came 
into the hands of the speculators, but were frequently compelled 
from the force of circumstance?, which I have related, to pay 
the speculators first. 

Q. Was any money placed in the hands of any officer of the 
company for the purpose of taking up these bonds '■'. If so, to 
whom, and to what amount? 

A. I remitted $25,000 to Mr. II. W. Guion to pay these, 
and others claims. These remittances were made at different 
times, I think between the 1st of April and October, 1869. I 
remitted to him, because he was the attorney of the company, 
was one of the directors, had been the President, these claims 
had been created during his administration, manv of them 
were in dispute, some ot them in suit, and he was perfectly 
familiar with all the questions which had arisen in connection 
with them. I have no knowledge of his transactions, except 
as is communicated in his own account published in the Bragg 
report. The balance to his debit, as set forth in that account, 
has been settled with the present administration of the road. 

Q. Please state what number ot first mortgage bonds ot the 
Wilmington, Charlotte & Rutherford Railroad came into your 
hands as president, or came under your control, what disposi- 
tion was made of the same, at what prices sold, and how the pro- 
ceeds were expended \ 

A. The mortgage was first made for tour million of dollars, 
and that amount of bonds was printed and executed, and in 
my hands. Fifteen hundred thousand were cancelled and 
destroyed by ordinance of the convention ; five hundred thou- 
sand deposited with the Public Treasurer of the State ; six 



410 Document No. 11. [Session 

hundred thousand were passed over to my successor, leaving 
fourteen hundred thousand which were sold, and the proceeds 
expended by inc. The net proceeds of these fourteen hundred 
thousand dollrrs of bonds amounted in cash to nine hundred 
and ninety-six thousand two hundred and seven dollars and 
six cents. It is impossible for me to give the items for which 
this specific sum was expended. As the bonds were sold the 
proceeds went into the general fund, and were expended in 
connection with other sums received from various sources, a 
condensed account of which is contained in my report to the 
stockholders of the 20th of October, 1800, which I ask to make 
apart of this my answer. The average price received for the 
bonds was 71 1-2 cents on the dollar. 

Q. In your account filed as part of your testimony you state 
a large item of 85S7,217.$8 for interest, commission and cou- 
pons. Explain what was meant by interest, commission and 
coupons, and how the same was paid '. 

A. I mean the coupons on our first mortgage bonds, which 
were regularly paid as they fell due, and amounted to $167,- 
673.34. Also all the commission and interest which we had 
paid upon our negotiations of all kinds since the war ended, 
much of it being interest upon our ante-war debt, some of 
which had been running ten years, these commissions, 
amounting to $56,993.97. A part of the above sum was paid 
to our agents for negotiating loans, selling bonds, and such 
services as are usually rendered by the financial agents of a 
company. Further, none of it was paid to the members of the 
Legislature, or of the convention, or to our own people, for the 
passage of bills, or to influence legislation of any kind, or for 
any of the purposes in the objects of this investigation, but to 
banl ' and commission merchants, in accordance 

with the ordinary rules governing financial transactions. De- 
tailed account b transactions have been submitted 
from time to time to the different meetings oi stockholders, and 
every • or Btnall, is sustained by its proper 
voi . which have been examined and approved by the 



1871-72.] Document No. 11. 411 

auditing committees ot the company, who have so reported 
from year to year to the stockholders who appointed them. 

Q. State what number of miles ot road have been built 
under your administration ? What is meant in your account 
filed as part of your answer, by reconstruction and extension ? 

A. Seventeen miles of road were actually completed. Five 
miles ot this, from Rockingham to the Pedee River, is by far 
the heaviest work upon the whole line of the road ; the most 
part of it being a very deep cut, through a solid block of 
granite. I cannot give the exact cost without reference to the 
books of the company, but it was very heavy, I think four 
times the amount ot the engineer's estimate. In addition to 
this, a good deal of grading was done, and there was iron 
enough on both sides of the road to lay two or three miles of 
the road, which was afterwards laid by my successor. It is this 
work which is meant to be included in the term " extension." 
" Reconstruction " is meant to include the cost ot rebuilding 
the road, which was destroyed at the close of the war, in part 
by the Confederate authorities, and in part by the Federal 
army, a large portion of the track having been torn up and 
destroyed, and all of the bridges and trestle work, warehouses 
and water stations, depot buildings, workshops and stationary, 
machinery and material and supplies on the Eastern Division 
and the Catawba bridge, on the Western Division, having been 
burned. In this general destruction was included much of the 
rolling stock of the company, which was replaced at a cost of 
8231,182.11, which appears in the account under the head of 
equipment. 

Q. Do you know any thing ot a sum of $2,500 alleged to 
have been paid by L. G. Estes to Deweese and Laflin to in- 
fluence Laflin in voting for an appropriation by the Conven- 
tion of one million bonds to the W. C. & R. R. R., and said by 
Estes to have been repaid to him by Soutter& Co. \ 

A. I do not. I never heard of it until this morning. My 
answer to your third question contains all the knowledge that 
I have of money paid out upon that occasion. 



412 Document No. 11. [Session 

Q. Do you know, or have you heard any thing of any money 
paid out by Mr. Porter from his private funds in connection 
with the University Railroad suit? 

A. I do not know any thing - . 1 heard Mr. Porter state to 
the committee appointed by the directors to settle his bond 
accounts that he had paid out a sum about $4,000, I think, 
out of his private funds in connection with that suit. 

Col. Cowan farther says, that upon examinati :' dates, he 
finds that Mr. Guion was not the attorney of the company at 
the time the money was placed in his hands to pay off the an- 
ticipation bonds, as previously stated, but was a direct' . 

ROBT. II. COWAN. 

Sworn to and subscrib re the Commission. 



Novembeb, 16th, 1871. 

Mr. B. P. Gh ex appeared and testified: 

Q. What official position did you occupy on the Wilming- 
ton, Charlotte & Rutherford Railroad Company in the years 
18G9 and 1870 '. 

A. I held the position of Chief Engineer and Superinten- 
dent on both divisions of the road. Previously, | i -d occupied 
for many years the same position on the Western Division. 

Q. Please explain to the Commission what were the bonds 
known as anticipation bonds in thai road .' 

A. They were bonds given to contractors for work done 
previous to Vw- war, and made payable to bearer, given in 
anticipation of the completion oi each twenty-five miles, at 
which time they became due, In this form they wereneeo- 
tiahle, and many oi them p issi d from the original holders into 
other hands. 

Q. Did you purchase any of these anticipation bends' If 
so, state under what circumstances they were bought and at 



1871-72.] Document No. 11. * 413 

what prices \ Whether thei*e was any understanding between 
you and the officers of the company in regard to the payment 
of these bonds before your purchase, what you received for 
them, and all matters connected with the subject, and all 
matters connected with the sale of these bonds by yourself, or 
any other officer or employee of the company ? 

A. I purchasedjoonds ot this kind before, and some during 
the war, and had in the year 1866, bonds to about the amount 
of twenty-five hundred dollars, which were deposited with the 
treasurer of the company to be exchanged for first mortgage 
bonds of the company, and subsequently bought bonds enough 
so as to make deposit for exchange even three thonsaed dollars, 
because the first mortgage bonds were of the denomination of 
one thousand dollars each, and I would otherwise have lost the 
benefit of the fraction. I did not invest again in these bonds 
until May 13, 1869, when I bought a bond from L. E. Thomp- 
son, Esq., about $250 for which I paid seventy-five in the dol 
lar. Also another bond at the assignee's sale in bankruptcy of 
A. It. Ilolmesly. This bond was for about twenty-nine (2900) 
hundred dollars, and I paid (79) seventy-nine cents in the dol- 
lar to A. Tl. Ilomesly who was the purchaser at the sale. These 
prices were the highest market value at the time, and Wil- 
mington was the only market, and the reported sale ot Cronly 
& Morris, auctioneers, governed the purchase of them. T. W. 
Dewev & Co.. were interested with me in the two bonds above 
mentioned, having advanced the money necessary for their 
purchase. They also bought bonds or a bond, paying in June 23, 
1S60, seven hundred and eight (70S) dollars in cash. I do not 
know at what discount they got the bonds. The cash paid was 
charged up to me in my bank accoont, and went with the other 
bonds to the common funds, and were eventually paid at par and 
about the last that were paid. I never had any understanding 
with any of the officers of the company directly or indirectly, 
in regard to the payment, nor did I have it in my power or 
influence to control their payment. I bought them simply as 
an investment on my own judgement, and one that I believed 



414 Document No. 11. [Session 

would be eventually paid, and I Agreed to divide profits in 
there purchases with T. W. Dewey & Co., simply because I 
did not have the money myself to purchase them with I do 
not think any other officer of the road bought the bonds of 
the company except Jno. G. Justice, who was a local agent at 
Lincolnton, but I do not know to what extent, nor did I ever 
inquire, as I considered them as legitimate objects of trafic as 
bank bills, and not one for official interference on my part. 

4. Do you know anything of Dr. Sloan's contracts with J. 
F. Pickrell or how he has disposed of the bonds, which came 
into his hands as president '. 

A. I never had any knowledge of his finanicial arrange- 
ments; nor with his transactions with J. F. Pickrell. 

5. Do you know anything of his sale to Pickrell of a certain 
sulphur mine in the county of Gaston \ what is the value of the 
land, mine (fee. \ 

A, I know nothing of the sale. I know that the land was 
surveyed, and that Pickrell told me that he had bought it. and 
enquired its value as mining property. As land, the property 
is nearly valnless for agricultural purposes, but as mineral 
property, it may prove to be of considerable value, as it contains 
an abundant vein of the finest sulphurct of iron in this or any 
other State. I know nothing of any private agreements 
between Pickrell and Sloan. 

Q. The statement made by Mr. John G. Justice in reference 
to a certain contract for the completion of the road from Cher- 
ryville to Rutherfordton has been called to your attention. 
"Will you plear-e say if it is correct or not '. 

A. It is substantially correct. 1 was the original contractor 
expecting to quit the road as an officer. Being re-elected un- 
expectedly, I sold my interest in the contract, leaving it with 
the purchaser to take it at $2,500, without guarantee. It 
guaranteed, 1 was to receive a certain interest in what they 

,1c over $10, They took it without the guarantee, and 

contra 5 taken at less than that with Mr. Harvey, extra 



1871-72.] Document No. 11. 415 

hauling being excluded. This contract was made with R. H. 
Cowan, and the old board of directors. 

B. S. GUIOX. 
Sworn to and subscribed before the commission. 

Testimony of IT. W. Guion, of Charlotte. 

Q. When did you cease to act as president of the Wilming- 
ton, Charlotte and Rutherford Railroad Company, and who 
succeeded you ? 

A. I declined a re-appointment to the office at the regular 
annual meeting of the company, held at Rockingham, iu the 
county of Richmond, in the month of October, A. D. 1863, 
and Colonel Robert H. Cowan was elected as m} r successor. 

Q. Please state what number of first and second mortgage 
bonds were issued by the company ; at what time they were 
issued ; at what prices sold, and what disposition was made of 
the proceeds of the same % 

A. During my administration, what are termed first mort- 
gage bonds, or rather, what were so styled up to the year 186 — 
were bonds issued by the Wilmington, Charlotte and Ruther- 
ford R. R. Co., and delivered to the Public Treasurer of the State 
in exchange for the bonds of the State in accordance with the 

O 

charter. The number of bonds so issued and delivered to the 
Treasurer in all, were two thousand, amounting to two millions 
of dollars. One million of these bonds were exchanged at dif- 
ferent times before the war, in sums of $200,000, upon the 
completion ot each section oi twenty-five miles of road. The 
exact time when each lot was exchanged, I cannot state with- 
out my papers, though the books of the Treasurer will show 
the dates. The other million was received by me during the 
war, the larger portion, I believe, in 1S63. The State bonds 
were solely applied to the construction and equipment of the 
road, and the proceeds of each lot were generally spent in 
advance ot their receipt from the Treasurer. Loans were 
obtained from the several banks of the State, and elsewhere, 
and a pledge given to him that when the bonds were due to us 



41 Document No. 11. [Session 

upon the completion of a section, that they might draw from 
the Treasury the number of bonds agreed on, for their secu- 
rity, or I would draw them and place them with the officers of 
the banks. The latter course was invariably pursued, I be- 
lieve, and when the bonds were received, the number agreed 
on were deposited with the banks as collateral security for the 
debts due from us. The bonds so deposited were sold to the 
banks holding our notes, they paying the New York price, 
ranging generally from 92 to 95 cents in the dollar. One lot 
after the war began, viz: in April or May, 1861, sold for less, 
entailing a heavy loss upon us, by the depreciation of State 
bonds at that time. We were compelled to sell at that time, 
and deemed it judicious to do so, as great doubt and uncer- 
tainty hung over the future. 

As to the other million received after the beginning of the 
war. $150,000 were delivered, by an ordinance of the Conven- 
tion, to James T. Soutter, Esq., in part payment of iron sold 
by him to us for the Eastern Division ; out of the remainder, 
about $450,000 of the bonds were retained and received to 
meet the liabilities due in London, Xew York and Philadel- 
phia for iron bought and delivered for the "Western Division, 
and for a locomotive, and spikes and chairs. The residue not 
so reserved, were sold above par and the proceeds applied to 
debts contracted in this State, chiefly with the banks before 
the war. 

By the charter, the State acquired a lien upon all th • prop- 
erty, present and prospective, of the Railroad company to 
secure her in exchanging her bonds, an I this statutory lien 
has been generally spoken of a< a mortgage, though in feet 
no mortgage was ever made or required. 

After the war, the Board of Directors fearing that the State 
bonds could nol be used for building the road without a ruin- 
ous sacrifice, deemed it advisable to apply for authority to 
issue an eight per cent. bend, and to mortgage the road to 
such capitalists as would purchase them; and to secure for 
such 1 ondsthe highest price, and thereby incur as little debt 



1871-'72.] Document No. 11. 417 

as possible for the completion of the road. They also asked 
that this latter mortgage might take precedence over the 
State's statutory lien, and become really the first mortgage of 
the road and property of the company. This proposition was 
not made until we had assurances from northern capitalists 
that such bonds upon such a road so economically built, would 
command ninety cents in the dollar, and we felt assured that 
an acceptance of the proposition would redound as well to the 
interest of the State as the company. The authority we re- 
quested was granted, and in pursuance thereof four millions 
of dollars in bonds were issued, and the mortgage made to 
secure them. This thereby became the first mortgage, and 
the State's lien the second mortgage, as it is commonly called. 
By a subsequent act, the amount of four millions was reduced 
to two and a half millions, one and a half millions being can- 
celled, $500,000 being deposited with the Treasurer of the 
State as collateral security for the State's endorsement of one 
million of the 8 per cent, bonds. Col. Cowan received by 
virtue of this legislation only two millions of the four, first 
inserted in the mortgage. And the promises made and as- 
surances given by northern capitalists were not maintained or 
realized, as shortly after the issue, the Congress of the United 
States commenced its reconstruction measures, which greatly 
impaired the value of southern securities in the northern 
market. After the war, I only occasionally attended a meet- 
ing of the directors, living then upon the Cape Fear, in 
Bladen county, and being in feeble health. I cannot there- 
fore state what he realized upon these first mortgage bonds, 
nor how he applied the proceeds of the same, faither than ap- 
pearsin his account as published in his reports to the Hail— 
road company. 

Q. "Will you state how many miles of said road was built 
during your administration ; how many during the administra- 
tion of R. II. Cowan ; and how many have been built since \ 

A. During my term, there were completed on the Eastern 
Division, from the Cape Fear westward, to Charlotte. 100 

27 



418 Dooumin No. 11. [Session 

miles, and on the Westers Division, from Charlotte to Ruther- 

fordton, forty-three miles. On both divisions there were many 
seetions on which the grading was completed or nearly so, and 
ready lor the iron. When the war began, the whole road was 
under contract, with the prospect ot final completion in Is 
months. Col. Cowan completed about 17 miles on the Eastern 
Division, crossing the Pee Dee river ; the last live miles, be- 
tween Rockingham and the Pee Dee, lying along the line of 
junction between the up-country and low country, proving as 
is most usual, the heaviest point of construction on the whole 
line to the base of the mouutains. On the Western Division. 
Col. Cowan had contractors at work, and was ready to contin in- 
die track from Cherryville to Shelby, when the company was 
reorganized, and he ceased to be President. Since then a tew 
miles ot track have been laid west of the Pee Dee, but how 
many I do not know. 

Q. Please give the Commission a full statement of all mat- 
ters connected with what are known as "Anticipation Bonds" 
of tilt' Wilmington, Charlotte & Rntherford 1 tail road Com- 
pany, so far as they may be known to you, and state whether 
any money of the company was used by any officer or director 
of the company tor the purpose of buying these bonds at a dis- 
count and collecting them in full X State all you know about 
the Bale of North Carolina State bond- issued to this company 
or to any other company, or any other matter connected there- 
with^ pertinent to this investigation. 

A. Jn the fall of L854 the company was organized and I 
was chosen the first president. The stock subscribed, how 
ever, was wholly insufficienl to justify the commencement of 
the work, and I canvassed Beveral counties, and, with other.-. 
addressed our citizens. I told them that the State had not 
been as liberal to this company, with her promised aid. as she 
had bet a to others, yet, notwithstanding, if they would engage 

in it- construction with a proper spirit and determination,!! 
could secure for I Ives the benefits of the enterprise. To 

<lo go, they should taki k, and work it oul al model 



1871-72.] Document No. 11. 41? 

prices, without any hope or desire to make great profits by 
their contracts ; that by taking two years, in which to complete 
all such work as could be done by them, they could not only 
work out their stock safely, but also do work to the amount ot 
one-third or one-fourth more than their stock, and take the 
bond of the company for such excess, payable out of the bonds 
of the State, when received and sold upon the completion ot 
each section of twenty-five miles. With few exceptions, all 
the contracts for grading and cross ties were so made, and our 
own people with a laudable spirit took such contracts, either 
singly or in companies, and went earnestly to work. When the 
estimates were rendered, payments on the stock were credited 
for the two-thirds or three-fourths, and a bond or bonds were 
issued for the remainder, payable out of the proceeds of the 
State bonds, when received at the end of the twenty-five nines. 
As they were drawn upon an anticipated fund, they acquired 
the name ot " Anticipation 3>onds." Large numbers were 
issued, and so anxious were our own people to secure the 
completion of the road, that although many of these bonds 
became due, the holders were unwilling to present them for 
payment for fear of embarrassing the directory. I recol- 
lect no case belore the war in which payment was demanded. 
After the war, however, though not president then, I was fre- 
quently consulted as to the payment of them and the propriety 
of selling them in case the company could not pay. I advised 
all parties to hold them as they would certainly be paid. Neces- 
sity however, compelled many to sell, and when the 8 per 
cent, bonds were in the hands of the directory, speculation 
became very rife, and greatly annoyed the board of directors. 
The president complained that it embarrassed him in other 
negotiations, and in trying to prosecute the work towards its 
final completion. I am thoroughly satisfied that- no member 
of the board of directors, ever engaged in buying any of the 
bonds, for each and every one so stated positively at one of our 
meetings ; neither do I believe that any friend or relative of any 
member ot the board ever engaged in snch sj eculative pur- 



420 Document No. 11. [Session 

chases, with the understanding or hope that his claim would 
be advanced by reason ot such relations. My brother, B. S. 
Guion, held some few ot these bonds. I know, which he had 
received, either in whole, or in part for debts due to him, but 
I have no reason to believe that he was engaged in speculating 
in them. lie was the superintendent of the company, and I 
believe that he, instead ot being preferred as to payment, was 
among the last to be paid. In relation to his bonds, I do not 
remember that we ever conversed until recently ; and as he 
has been before the commission, the truth of the matter has 
been more fully given by him than I can detail it. My nephew, 
J. G. Justice, a station agent at Lincolnton, in behalf of cer- 
tain capitalists in Charlotte, I was aware, bought some ot the 
Anticipation bonds, but I found no fault with him on account 
of his being station agent, inasmuch as other parties were engaged 
in the same speculations. From his position, and relationship 
with me, then a director, he acquired no favor at all in having 
his bonds paid, but on the other hand as I learned, payment 
was refused him, and he was compelled to sell to other parties. 
In January, 1869, a bill was before the Legislature, introduced 
without the knowledge or request of any member of the board 
of directors, or the company itself, to amend the charter of the 
company, in sucha way as would destroy its value. This bill 
proposed that the State should take four millions of dollars 
of stock in the company, pay tor the same in bonds of the 
State at par, and that the governor Bhould appoint a majority 
<>l' tire directory. At the same time it was generally reported 
and believed that the management of the roads would, by the 
Governor, be entrusted to Messrs. French, Estes, Abbott and 
others, in whom we had no confidence. We therefore commu- 
nicated with members in the Legislature, and stated that a 
bill BO obnoxious would be bitterly opposed in the stockhol- 
ders' convent^ d, and would certainly be rejected. We also 
Buggeeted certain amendments, which, if inserted, might render 
the bill less objectionable to the stockholders. It was appa 
rent to ue at that time, that the management of the company 



1871-'72.] Document No. 11. 421 

was to be forced into the control of the State, and resistance 
would be of no avail, as the company was in arrears for its 
interest on the bonds held by the State, and by the charter. 
The literary board was authorized to enter upon and take pos- 
session of the road, the franchise and other propert}-. The 
bill with some of the amendments suggested, was passed by 
the Legislature in April, 1309, and by its terms, the amend- 
ments were to be passed upon by the stockholders within 
ninety days from the ratification of the act, and thereafter the 
treasurer was to subscribe for fonr millions of dollars in the 
capital stock, and to deliver over to the president, then Col. 
Cowan, one million of the bonds, and within sixty days there- 
after, the company was to be reorganized by the election of six 
directors on the part of the private stockholders and seven were 
to be appointed by the governor of the State, then Governor 
Holden. The charter was accepted ; the subscription made, 
and after some delay, owing to the breaking of the engraver's 
plates, as the treasurer stated, the first million of bonds was 
handed over to Col. Cowan. Fearing that the new organiza- 
tion, which was to take place at the end of sixty days, would 
adopt a line of policy adverse to the welfare of our own people 
and stockholders, we determined and instructed the president 
to convert the bonds into money at an early day, and pay off 
the anticipation bonds of the company which had been issued 
to our own citizens for work done at low rates, averaging from 
eight to twelve cents per cubic yard, on Their contracts faith- 
fully performed, and in doing so, to pay off those bonds still 
held by the original contractors in full, both principal and 
interest, and those purchased and held by speculators, to com- 
pound on the best terms possible. The president endeavored to 
comply with the resolution, though we had much difficulty in 
gaining the money on account of certain intrigues practiced in 
New York. Our purpose of paying it was made known gene- 
rally. A large sum was sent to the treasurer of the Western 
Division at Lincolnton, and fifteen thousand sent to me at 
Charlotte to assist in paying off the bonds. These sums were 



\'J2 Do. i mi.nt Xo. 11. [Session 

disbursed by both of us. and an account thereof stated in the 
report oi the Bragg eominittee. During the disbursement, I 
found it impossible to cotnpourid with speculators, they really 
being more impracticable than the original holders, some of 
whom ottered to take less than their debts. This facl was 
communicated to Col. Cowan, and he instructed me to pay 
the whole, if no compromise could lie effected. Some 
time after these disbursements were made by the treasurer 
and myself, and my agency was ended, Mr. Dewey, of Char- 
lotte, called on me, and said there were certain bonds offered 
to him, and lie would buy them, and pay me a com- 
mission to collect them if 1 could. 1 told him I feared 
the funds set apart for such bonds were exhausted, and if he 
purchased he might have to sue on then), but I would see it 
they could be paid. I wrote to Col. Cowan about them, and 
after some delay, he sent a check for the amount, which amount 
is also set out in the Bragg report, as the second sum forwarded 
to me. These bonds were obtained from Mr. Crier, to whom 
they had been sent by some one residing in Arkansas, and 
from others, not now remembered by me. As I was not then 
the attorney or agent of the company I had no hesitation in 
receiving the usual commission tor collection, as I was then the 
attorney of the Bank oi which Mr. Dewey was the Cashier. 
These I believe were the last bonds that were paid, at least in 
the Western part oi the State, though a lew others are still 
outstanding in the hands of parties who did not learn that 
Buch bonds were being paid. There were insinuations 
made by certain persons dealing in these bonds to the effect 
that partiality was shown by the officers of the road to their 
own relations or personal friends, but I am satisfied there was 
no foundation for such a charge, ami I apprehend it came trom 
the feet that speculators were, in a few instances at first, put 
off for a time, until the original holders should be paid, or it 
should be ascertained that the fund appropriated to the pur- 
pose should justify their payment in lull. I would further 
state, in relation to myself, that during the disbursement of the 



1871-72,] Document No. 11. 42S 

funnels received from Col. Cowan in July or August, I was 
only a director in the road, and was riot elected to the office of 
the attorney of the company until the meeting ensuing the 
death of the Hon. S. J. Person, which occurred on the last of 
October, 1869. He had filled that office for several years pre- 
vious to his death ; that out of the first fund of $15,000 sent to 
me there was the sum of $2,100 not disbursed, but retained 
by me as a trust fund to meet sundry claims outstanding, but 
about which we had conflicting views. They were just in the 
main, and the fund was retained in the hope that they could 
be properly adjusted. The retention, however, caused me 
much trouble, as other parties sought to have it applied to 
their claims, and as I was unwilling to do so, and the disputed 
claims could not be settled without recourse to the courts, 1 
paid over that balance and another of about $500, (remaining 
undisbursed of the second remittance of Col. Cowan,) to the 
president of the road after the new organization to be applied 
as the board should see proper. Another attorney had then 
been elected, and my directorship had terminated. As to 
that portion of the interrogatory which requires me to " state 
all I know about the sale of North Carolina State bonds issued 
to this or any other company," all I can say is, that I really 
know nothing as to any sale whatever; that I have never been 
present when any were sold, nor otherwise acquired any know- 
ledge of such sale further than the common reports which have 
been in general circulation. 

Q. In your answer to the last interrogatory you alluded to 
intrigues in New York. Will you explain that allusion, and also 
state all you know in relation to the decision of the Supreme 
Court in the University case, and what connection your com- 
pany had with lhat decision \ 

A. After the acceptance of the amendments to the charter 
in 1869, the board of directors, associated Judge S. J. Person 
and myself with Col. Cowan, as a committee to go to New 
York, and negotiate the sale of the first million of bonds, 
which were to come into the hands of the old board, as we 



484: Document No. 11. [Session 

supposed, in a short time. The delivery of the bonds by the 
treasurer was delayed until late in June, and we started 
together, and Col. Cowan and myself reached New York on 
Saturday evening the 3d of July, 1809. Judge Person 
remained in Baltimore with his wife until Monday evening.- 
The fifth was celebrated in New York in place ot the fourth, 
and soon after Judge Person arrived, Mr. Porter, of the firm of 
Soutter & Co., bankers and brokers in the city, came to see us 
at the St. Nicholas Hotel. lie produced and read to us what 
he said was a telegraphic dispatch from Raleigh, North Caro- 
lina, and its substance was to the effect, "That the Supreme 
Court had decided that all the bonds issued to all the railroad 
companies since the new constitution, were unconstitutional and 
void." We insisted that it was a trick, a bogus affair, and J udge 
Person and myself both urged that it could nor. apply to the 
Wilmington, Charlotte and Rutherford Railroad Company, for, 
in explicit terms in the constitution, this company did not, and 
could not fall within the restriction. We also argued that 
Judge Person had only a few days before left Raleigh, and no 
such decision had been made before his departure, and none 
such announced in the papers; that the court delivered their 
opinion on Monday and he had left on Thursday, and the 
telegram was therefore unfounded. Mr. Porter, however, 
averred that it was from a reliable source, and undoubted! v 
true. We were greatly astonished that a broker in New York 
could so positively assert what was done in our own Supreme 
Court in advance ot even the lawyers, and we devolved it upon 
Judge Person to telegraph to Raleigh and ascertain whether our 
company was included in the decision, if any such had been made. 
No answer being received on Tuesday, we requested him to 
telegraph again, and he did BO, and on the next day reported 
to us that his answer was, that our bonds and the bonds of all 
the other companies, as stated by Mr. Porter, were included 
in the decision of the court. Mr. Porter did not state from 
whom he had received his dispatch, neither did I ask or learn 
from Judge Person, to whom he had directed his message, or 



18Tl-'72.] Document No. 11. 425 

from whom he had received the answer. Conceiving that our 
company ought to be heard in a matter of so much moment, 
we requested Judge Person to again telegraph to Raleigh, and 
endeavor to obtain a rehearing of the case, to the end that the 
interests of the Wilmington, Charlotte & R. R. R. Company 
might be discussed and deliberately considered. He did so, and 
received for answer as he reported to us, that we should be 
heard on Monday of the week following, and he being the at- 
torney of the company, left for Raleigh at the instance of Col. 
Cowan, to prepare an argument of the case. We remained a day 
or two longer ; and concluded that it would not only be dis- 
reputable, but criminal in us, with the knowledge we possessed 
to offer the bonds to any parties whatever, and especially to 
any who might be ignorant of the decision of the Supreme 
Court, and we therefore packed them up, and deposited them 
with a bank for sate keeping, and left for oitr respective homes 
in Wilmington and Charlotte. During our stay in New York 
we were impressed with the truth of the telegrams, and shaped 
our course accordingly, but I shortly after came to the conclu- 
sion that the whole matter was an intrigue, a scheme for 
"bearing" North Carolina bonds on the market for speculative 
purposes, and also, perhaps, with the view of forcing our bonds 
off the market. At that time, there were in New York many 
other parties engaged in buying and selling bonds, who knew 
of Mr. Porter's telegrams, but yet continued to sell or buy not- 
withstanding. This was at the time incomprehensible to me, 
yet I did not confer with them upon the subject, or otherwise 
have any business relation with them. The subsequent deci- 
sion of the Supreme Court, and the continued speculation of 
those parties convinced me that it was a device to serve specu- 
lative purpeses Our bonds were afterwards sold by Col. 
Cowan alone, and he reported the sales to the company, and 
also, to the Bragg Committee I believe. In that report there 
was mention made of $30,000 of bonds retained by Soutter & 
Co. In regard thereto, I know nothing save what I have 
learned from Col. Cowan, and as he has testified I suppose it 



426 DoiTMKNT $0. 11. [Sc.-- 

L6 unnecessary lor me to recite the matter. Col. Cowan com- 
plained of its retention by Soutter & Co.j and a committee was 
appointed by the newly organized board of directors, of which 
F was one, to investigate the claims of Soutter A; Co., and en- 
deavor to settle it, but no time could be fixed by that linn, for 
our inquiry during the existence of the committee, that being 
dissolved by the election of another board. 

Q. Will you statu to whom did Judge Person direct his 
last telegram as to the re-hearing of the case in the Supreme 
Court, and from whom did he receive the answer '. State also 
the names of the other parties whom yon saw in New York 
referred to in your last answer? 

A. I did not learn from Judge Person the name of the party 
with whom he had telegraphic intercourse, as to the re-hear- 
ing. I took it for granted he would correspond with some 
suitable person in Raleigh, and had no curiosity to know the 
party. The answers were the matters of interest. The parties 
we saw in New York were Geo. W. Swepson, Mr. Littlefield, 
Mr. Mott, Mr. McAden, Sand. McD. Tate, Andrew J. Jones. 
and perhaps others. My memory in this regard may not be 
correct, and in fine, I would wish to be understood, that the 
several matters detailed in this deposition occurred so long- 
ago, that I may have committed mistakes, and it so, trust 
that they will not be imputed to any improper motive what- 
ever. 

II. W. GUION. 

Sworn to and subscribed before W. M. Shipp. 



1871-72.] DocuMfitra No. 11. 427 



APPENDIX. 



Extract from Col. Cowan's report to the stockholders of the 
Wilmington, Charlotte & Rutherford Railroad Company, Oct. 
20th, I860 : 

"The accompanying reports of the Superintendent and Treas- 
urers of your company will give you the detailed history of the 
management and operations of the road for that portion of the 
fiscal year during which it has been under our supervision. 
We deem it unnecessary, under the circumstances, to do more 
than refer to these reports, leaving it to the present manage- 
ment to submit such remarks, as in their judgment, the inter- 
ests of the company may require. 

AVe submit the following as the 'full statement of all our 
accounts and transactions," since the re-opening of the road in 
July, 1SG5, required by the terms of your resolution. 

The receipts have been as follows : 
Cash from James T. Soutter, for 150 North 

Carolina Bonds, paid him before the war, $ 91,682 50 

Cash from James T. Soutter, for 271 North 

Carolina bonds, exchanged and funded, 177,883 75 

Cash from James T. Soutter, for sale of iron, with 

interest, 10,581 70 

Cash from Duncan, Sherman & Co., for 130, and 

from James Tinker, for 15 North Carolina 

Bonds, in settlement, 101,500 00 

Cash from James Dawson, for 22 North Carolina 

Ponds, 13,323 60 

Cash from G. W. Grice, for 28 North Carolina 

Ponds, 17,486 65 

Cash from J. F.Hoke, for 2 North Carolina bonds, 

in settlement, at par, 2,000 00 

Cash from $1,100,000 first Mortgage Bonds, 090,207 06 



428 Document No. 11. [Session 

Cash from $1,000,000 North Carolina New- 
Bonds, 486,257 00 

Cash from Transportation Receipts, taken from 

Treasurer's Annual Reports, 760,086 94 

Cash from other sources, taken from Treasurer's 

Annual Reports, 57,006 81 

Cash from sale of Union County Bonds, 10,926 22 

Cash from notes discounted in New York, pay- 
able January, 1870, 138,735 50 



Total Receipts. $2,878,479 73 
i 
The expenditures have been as follows : 
To cash paid Anticipation Bunds. $128,428 38 
" Equipment, 231,482 11 
" Iron Account, 208,694 64 
" Bridges and Trebles, 63,818 09 
" Cross Ties, 85,586 22 
" Mechanical Dep't. 166,242 02 
" Graduation, 286.594 55 
" Transportation. L17,176 02 
" Stores, 32,456 4i> 
" Warehouses & W. S. 21,710 19 
" Steam Ferry, (inclu- 
ding cost of boat,) 72,j29 32 
Shops, 4,46 s !)] 
Wood, 54,380 83 
Oil and Waste, 12,797 47 
Engineering, 9,4."'L? 25 
Road Department, 109,013 54 
" Commission Account, 56,693 97 
Freight and Land 
I damages, 1<>,777 93 
" Negro hire (old acc't,) 10,226 83 
" Wharves, 25,559 1<> 
" Expenses, 69,320 9s 



a 
cc 
« 
cc 
cc 
a 
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a 
i. 

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cc 
cc 
cc 
cc 
cc 
a 

cc 
cc 
cc 



.. 
cc 
cc 
cc 



U K 



1871-72.] Document No. 11. 429 

To cash paid taxes, 9,706 98 

" Interest, 362,880 07 

" Pay Rolls, 257,630 25 

" Attorney's Fees, 3,575 00 

" Real Estate, 2,347 60 

" Stage Line, 8,487 45 

" W. R. W. Bridge Co., 58,791 57 

" Bills payable, 173,365 99 

" Coupon Account, 167,673 34 

Cash on hand, (cur 

rency,) 57,011 64 

Total Expenditures, $2,878,479 73 

These expenditures may be definitely classified as follows : 

Amount paid on Old Debts, 696,016 75 

" Reconstruction and Extension, 781, S96 74 

Equipment, 231,482 11 

Operating Expenses, 524,825 11 

.Interest, Coins. Coupons, 5S7,247 38 

Cash, ♦- 57,011 64 



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u 


u 


'• 


.. 


u 


u 


u 


St 


a 



Total Expenditures, $2,878,479 73 



Raleigh, N. C, Jan. 26th, 1871. 

To J. T. Pickrkll, Esq., 

Fmancial Agent rf th< W , ('. & 11. 11. B., 

New York. 
Deae Slit: As President of the Wilmington, Charlotte <fe 
Rutherford Railroad Company for the fiscal year ending Oct. 
20, 1870, I hereby authorize and require you to make a full 

7 7 m l «« 

and complete settlement with Mr. Silas X. Martin, President 
of that company as elected on the 20th Oct., 1870, and to pay 
and deliver to him all balances due the company, including 



4?>i> Document .No. 11. [Session 

all bonds and interest coupons paid by you as the company's 
financial agent, embracing the $56,000 of interest coupons 
paid by you as such agent in July last, and now remaining 
cancelled in your hands, subject to my order. 
Very respectfully. &c, 

WM. SLOAN. 
Test : W. P. Bykum. 
I certify that the above is a true copy. 

E. 8. WOODFORD, 
Copyist. 

AlM'ii !LE8 OF A< .KKKMKNT. 

Articles ol agreement made in the City of New York, this 
21st day of January, 1S70, between William Sloan (President 
of the Wilmington, Charlotte and Kutheriord Railroad Com- 
pany of North Carolina) and John V. Pickrell, of New York 
witnesseth : That the party of the second part agrees to ad- 
vance to the party of the first part, Ninety Thousand Dollars 
in cash, and such additional sums as he may hereafter require 
within the range of this agreement, upon the following basis: 

The party of the iirst part to hypothecate with the party 
ofthesecond part, North Carolina Special Tax Bonds upon 
a basis of ten dollars on the hundred, with power and au- 
thority to sell the same in accordance with the rules of tin- 
stock board in default of payment ; and the party of the first 
part agrees, that if the partyof the second part shall continue 
this advance to a sum oi two hundred thousand dollars, and 
the stock board shall at any time throw out the said special 
bonds, so as they shall not be a good delivery, then the 
party ol the first pari is to pledge and hypothecate an amount 
oi his company's first mortgage bonds on a b forty 

cents on the dollar, as additional collateral security for said. 
advance, with interest and cha:. 3; and the party of th- 
Becond part agrees, ] place upon the market or sell the 

first mortgage bonds of such company, which may be by- 



1*71-72.] Document No. 11. 431 

pothecated in his hands, without giving- the party of the first 

part thirty days' notice for their redemption, and in any event 

to exhaust the special tax bonds before disposing- of the first 

mortgage bonds. 

Signed in duplicate in the city of New York. 

, . WM. SLOAN, 

| Int. Rev. | Presd't W., C. & R. R. R. Co, 
J 25c. *- 

Stamp. | JOHN F. PICKRELL. 



I certify that the above is true copy. 

E. S. WOODFORD, 
Copyist. 



432 



D(Xn:MENT No. 11. 



[Seseioi 



AVII, CHAR. AND RUTHERFORD RAILROAD CO. 



Dfe. 



L870 








Day6. 


I terest. 


Jan. 21 


Loan, 


60,000 




192 


2,240 




25 


K 


30,000 




188 


1.096 


67 


March. 11 


u 


01,900 




143 


1,721 


16 


April, 28 


u 


500 




95 


9 


24 


May, 10 


Cos. dft., 12,000 


10,000 




83 


161 


40 


24 


" " 1 3,000 


25,000 




69 


335 


42 


26 


Loan, 


10,957 


38 


67 


142 


7:> 


31 


" 


2,000 




62 


24 


12 


.lime, 25 


ti 


30,368 


54 


37 


218 


48 


25 


« 


4,07o 


7o 


37 


29 


2s 


30 


u 


89,230 




32 


555 


52 


.1 nly, 1 


i« 


50,000 




31 


301 


38 


19 


.. 


2,000 


62 


16 


62 


22 




$ 394,026 






Bal. Int. 77 e. 
To Balance, 


6,788 


84 
46 
46 




$ 0,897 






$ 400,815 


34 


Aug. 1 


397,815 





1871-'72.1 



Document No. 11. 



433 



"LOAN ACCOUNT' 1 WITH JOHN F. PICKRELL. 



Ck. 



1870 
.Jan. 27 



Check Bk. Rep. 
Balance Interest, 



By Balance, 



3,000 



397,815 



$ 100,815 



16 
46 



Days. 
186 



Interest, 

108 
6,788 



50 

84 



$ 6,897 



34 



Deposited with me, as collaterals, as per agreement ; 1,700 

North Carolina special tax bonds 600, 1st mortgage bonds W. 

C. & R. R. R. 

E. & O. E. Signed, JOHN F. PICKRELL, 

By A. A. Denman, Booh Keeper. 



28 



434 



Do: UMBNT No. H, 



[Session 



WILMINGTON, CHARLOTTE & RUTHERFORD RAILROAD COMPANY IN 
LOAN ACCOUNT WITH JOHN F. PK'KRELL. 



DATE. 



ITEMS. 



AMOUNT. 



1870. 

Jan'y 21 



26 
Mar. 10 

11 



Loan 

Co.n. 2 percent, permont 

Loans, 

Com. 2 percent, per month, 

Telegram, 
Commissions, 

Commission, 
Commissions, 

Loan, 
Commissions, 



$ 60,000 
10,560 



April 28] Loan, 

Commissions, 

28 Telegrams, 
Commissions. 



II;. y 10 
24 

2; 
26 



Loan, 
Commissions, 

Loan, 
Commissions, 

Loan, 

Commissions, 

Traveling expenses, 

Commissions, 



33 Loan, 

Commissions, 



■ ■l 



Telegrams, 

Commissions, 

Claims vs. road pervonch'rs 
Commissions, 



26 Iron purchased, 
Commissions, 

25 Travel osei . 

D8, 

25 Lo 

ms, 

.hi*, 
i lomn 



30,000 
5,200 






■ 



52 



',' 05 
51 



60,000 
8,560 



500 
55 97 



20 



10,000 
1,088 



34 



25,000 ; 
2,850 



10,957 38 
1,01588 



■joo 
1S5:; 



L'.O.'II, 

L79 



19 02 

•) 38 



5,409 16 
476 03 



4,070 70 



19 92 



30,868 54 
2,22 



89,2 
6,246 10 



75 5 1 



70,560 
35,200 
3 
3 
68,560 
555 '■•; 
22 
11,088 
27,350 
11,972 70 
21858 
2,179 
58 
5,88 

4,869 22 

291 58 

6 57 

95,476 in 



DYS 



INTEREST. 



267 1 3,603 



40 












26S 

262 

219 

218 

170 

170 

158 

144 

142 

142 

137 

137 

184 

112 

112 

112 

107 

. 3 



1,800 



2,906 
18 



785 



58 

1 

153 

95 

6 

L.986 IS 

1 68 



24 

09 

18 

15 

18 

38 

75 

07 

80 

58 

08 

05 

u 

85 

15 



1871-72.] 



Document No. 11 



435 



WILMINGTON, CHARLOTTE & RUTHERFORD RAILROAD COMPANY IN 
LOAN ACCOUNT WITH JOHN F. PICKRELL.— [Coxtimed.] 



DATE. 


ITEMS. 


AMOUNT. 


DTS 


INTEREST. 


July 1 


Loan, 
Commisions, 

Telegrams, 
Commissions, 

Loan, 
Commissions, 

Telegrams, 
Commissions, 

Traveling expenses, 
Commissions, 

Telegrams, 
Traveling expenses, 

Interest at 7 per cent, 

2).< per cent. commissioB, 

By cash, 
To balance, 


$ 50,000 
3,406 


67 


$ 53,466 

11 

21,186 

37 

100 

3 

566 


67 
10 
67 

88 

47 
75 
15 

12 

24 


106 
95 
91 
51 

7 


I 1,102 
374 




12 


10 


45 
65 

67 


2£ 

89 


16 


' 20,000 
1,186 


Aug. 25 


33 
1 


66 

22 

47 
97 


Oct. 8 


100 


1 1 


15 


$ 404,506 


i 




* 441,784 
14,320 


$ 14,320 
$ 464506 


24 




§ 456,104 
11,402 


36 
61 




June 21 


§ 467,506 
3,000 


97 




Oct. 15 


$ 464,506 


97 


97 



The above account is correct and approved, 

E/& O. E. (Signed.) WM. SLOAN, 

President Wilmington, Charlotte & 'Rutherford Railroad Company. 
Charlotte, N. C, October 18th, 1870. 



Ucertify that the above is a true copy. 



E. S. WOODFORD, Copyist. 



4'M 



Document No. 11. 



iSc^r- 



WILMIXGTON CHARLOTTE AND RUTHERFORD RAILROAD CO., 
Dr. 



1870. 
Oct. 15 



To balance as per acc't. 

rendered, 

Convns 2 per ct.per mo. 

Int. 7 per ct. toNov. 20. 



464,r,06 
12,090 



97 
52 


$477,203 
3,897 


49 
16 

65 
65 


481,100 


$481,100 



42 



In't 



:; ; s:.7 



16 



1871-'72.] 



Document Ko. 11. 



437 



IN LOAN xVCCOUNT WITH JOHN F. PICKRELL. 



Ck. 



1870. 
Nov 26 



20 



Nov 26 



By Proceeds Special tax 
Bonds to Oddie & Co. 
1,700 at 17, 7 1-2 per 
cent, oft', 



1-4 per ct. commissions, 

1-4 Proceeds W. C. R. R. 
R. Bonds to Oddie& Co. 
600 at 46 3-4, 1-4 per ct. 
commissions. 
Balance, 



289,000 
127,500 



161,500 

4.250 



280,300 
1.500 



$ 157,250 



279,000 



436,260 
44,850 



$481,100 



6a 
65 



The above account is correct and is approved. 

E. &. O. E. WM. SLOAN, President W. C. & R. R. R. 

Charlotte, N. C, November 26th, 1870. 



138 



DOCUMBNI No. 11. 



I Session 



WILMINGTON, [CHARLOTTE & RUTHERFORD R. ;R. CO., IN "LOAN- 
ACCOUNT" WITH JOHNF. PICKRELL. 



1870. 

J ul v 



Oct. 15 



Cash for coupons, 
Internal Revenue Tax, 



2 per cent, per month 
commission, 



Interest a 7 per cent, 
to Oct. 15, 



Two and a half per 
cent, commission, 

To balance, 



5,442 
8,918 



$ 58,3(30 
4,04639 



? (32,40(3 
1,286 



5 03,692 
1,592 



i,V>i 



$05,284 



si; 



DATS. INT, 



100 



$1,286 20 



The above account is correct and is approved. 

K. &C B. (Signed) WM. SLOAN, 

President II'. C. & R. S. 11. Co. 
Charlotte, N. C, Oct. 18, 1870. 



1871-'72.] 



Document No. 11. 



4W 



WIL., CHAR. & RUTHERFORD R. R. CO. IN LOAN- 
ACCOUNT WITH JOHN F. PICKRELL. 



Dk. 


















DATE. 








AMOUNT. 


DYS INT. 


1870. 
Oct. 15. 


To balance as 
pr. act. ren- 
dered, 

Commissions; 

Int. at 7 pr. ct. 
to Nov. 26. 

To balance, 


$ 65,284 
1,784 


86 
45 


$ 67,069 
547 


31 
73 
04 


42 


$547 


7S 




$ 67,617 


04 


Nov. 26. 


67,617 





The above account is correct, and is approved. 

E. & O. E. ¥M. SLOAN, 

President WU., Char. & Rutherford Railroad. 
Charlotte, N. C, Nov. 26th, 1870. 



I certify that the above is a true copy. 

E. S. WOODFORD, Copyist. 



440 Document No. 11. [Session 



KEHOE INJUNCTION SUIT, AND ATLANTIC TEH 
NESSEEAND OHIO RAILROAD COMPANY. 

Raleigh, November 18th, 1871. 

Col. E.G. Haywood appeared, was sworn and testified as 

follows : 

Q. Were you one ot the plaintiffs attorneys in the suit ot 
Robert C. Kehoe, against D. A. Jenkins, Public Treasurer, and 
the A. T. & O. R. R. >. 

A. I was the original leading counsel in the cause. 

Q. Please state by whom you were employed, and if there 
were other parties engaged in the prosecution of that suit lie- 
sides Robert C. Kehoe ? It so, give their names '. 

A. I was originally retained in the suit by John T. Deweese, 
during the session ot the Circuit Court of the United States, 
at .lime term 1S60. I advised Mr. Deweese that it was neces- 
sary that any person whose name appeared as plaintiff in such 
a suit should be a tax payer to the State upon both real and 
personal property, not knowing whether he himself answered 
to that description, and recommended that he should pursue 
the course which had been pursued* in the case of Galloway 
against Jenkins and the Chatham Railroad, by procuring some 
third party who would answer the above description to act as 
nominal plain tifi in the cause, lie subsequently produced Mr. 
Kehoe as such plaintiff, and I understood myself to be the 
counsel of Messrs, Deweese, Kehoe, W. F. Askew, and such 
other tax payers as might thereafter unite with them in the 
prosecution of the suit. 

Q. Do you know how the injunction was obtained from 
.Judge Watts? And state the facts and circumstances connec- 
ted therewith. 

A. I obtained the injunction personally from Judge Watts. 
Without any previous arrangement with me, I learned that lie 
was in this city, ami having the papers ready prepared, com- 



lS71-'72.] Document No. 11. 141 

plaints and summonses and copies of each for the proper defen- 
dants, and the injunction order ready drawn, as is my practice 
in such cases, my impression is that I addressed a note to 
Judge Watts, requesting him to fix a time when it would be 
convenient for him to hear an application for an injunction. 
I do not think I named the case. During the forenoon of the 
day on which the injunction order was signed by Judge Watts, 
he came to my office and signified his readiness to hear the. ap- 
plication. I called his attention to the salient points of the 
case, cited Gralloway vs. Chatham Road and Jenkins as author- 
ity, read to him such portions ot the papers as were necessary 
for presenting the case, and urged an immediate decision, stat- 
ing to him that I had reason to believe from information which 
had reached me, that the bonds to the A. T. & O. R. R. were 
in the very act o** being issued and delivered, and I doubted 
whether we would be able to stop them all, even, if he granted 
the injunction order at once. Judge Watts declined to act at 
once, stated that he must think upon the question, and read 
the papers fully and in detail, before he came to a decision. 
Thereupon he took the papers in the cause away with him. 
After his departure I was apprehensive that the order would 
be refused, and having received no communication from him 
during the day, and a late hour in the afternoon of the same 
day having arrived, I dispatched my clerk, G. W. Whiting 
Esq., to Judge Watts' room at the Exchange Hotel, instructing 
him to urge upon Judge W. the necessity of an immediate de- 
cision, and to bring me the papers together with the injunction 
order, if Judge W. had signed it, at once. And if he had not 
signed it, I told my clerk he need not return with the papers 
until the next day. Subsequently, and late in the same after- 
noon, my clerk returned to my office with the papers in the 
cause, and the injunction order, signed by Judge Watts. This 
is all I know of the procuring of the original injunction order 
in the said cause. 

Q. Were Askew, or Kehoe or Deweess in town that day? 



442 Document No. 11. [Session 

A. Deweese, i think, was ; I know Kehoe was, bat I do not 
remember about Askew. 

Q. Did you communicate to those parties, or cither ot them, 
the fact that Judge "Watts had the papers above mentioned in 
his poss< ssion before they were returned to you '. 

A. My impression is — but not an entirely reliable one : 
although ;i decided one — that I saw none of these parties the 
day that I made the application, and that none of them were 
present when I first made the application to Judge Watts at 
my office : that I saw none ot them between the time when 
Judge Watts left my office, and the time when my clerk 
returned with the order, and probably for a short time before. 
T think he came into the office after my cleric had left to go to 
Judge Watts' room. I know that my clerk was not despatched 
to J ndge Watts at the suggestion of Mr. Deweese. So far as I 
recollect, this is the first time I saw Deweese that day, and I 
have no doubt I, at this time, communicated to him the fact 
that Judge "Watts was in town, and I had applied to him 
for the injunction in the Kchoe case, and was then awaiting 
his action. Upon my clerks' return, Kehoe was sent for — I 
think Deweese went for him —and subsequently during the 
same evening Deweese and Kehoe returned, and my impres- 
sion is that I suggested the necessity for an injunction bond, 
and Mr. I. J. Young was sent for to sign it as surety. 1 think 
Deweese went for him and returned with him. Mr. Young 
hesitated about signing the bond. He earnestly consulted 
with me as to the amount of liability he might ultimately incur 
by signing it. I tiiink he stated he was certainly worth the 
amount, but he disliked to be examined about his private 
affairs. I satisfied him that his liability would be nothing it 
we were successful, and could not ultimately amount to much 
if we failed, and after some delay and hesitation he signed the 
bond, at my office, as I think, and in my presence. According 
to my best recollection this is the first time I saw Mr. Yonng 
in connection with the business. I did not go with these gen- 
tlemen to the clerk's oilier, but instructed them what to d<> 



1871-72.] Document No. 11. 443 

when they went there, and that it would he necessary for the 
plaintiff to pay the clerk his initiatory costs in the cause. They 
all three left the office together, as I now think. My impres- 
sion is, it was then quite dark, and that I had despatched a 
messenger to the clerk before we separated at my office, 
requesting him to remain beyond his ordinary hours to transact 
this business. This is all I now recollect on this business. 

Q. Do you know whether Judge Watts and Deweese or 
Kehoe had any communication in reference to this subject, 
before the proceedings were instituted in the case, or betore 
the injunction was granted? 

A. I do not. I have no reason to think so. I have no 
knowledge that they ever had any communication with one 
another, either before the suit was instituted, or since, in 
reference to the said cause. 

Q. Do you know what relation Deweese sustained towards 
the A. T. & O. R. R. Co., and whether or not he had any mis- 
understanding with the officers of said company, in reference 
to the passage of the bills appropriating these bonds 2 

A. I do not know that he sustained any relation towards the 
road, except as the real plaintiff in the Kehoe case, and I have 
no knowledge whatever of any such misunderstanding. I do 
not think I ever heard of it till I heard it suggested to-day. 

Q. Was not this suit of Kehoe, in the A. T. & O. Railroad 
brought by Deweese and the other parties, for the purpose of 
forcing a compromise, and obtaining a certain number of the 
bonds, and not for the lona fide purpose of protecting the tax- 
payers of North Carolina \ 

A. I have no knowledge which would justify me in saying 
so. No compromise was suggested to me before or at the time 
the suit was brought, and I had no such belief, at the time. 

Q. Please give the commission such information as you may 
have in reference to the final settlement of this suit, how many 
State bonds were received in consideration of such settlement, 
and what disposition has been made of the same ? 

A. All the knowledge I have npon the subject of the com- 



41-i Document No. 11. sion 

promise, the n umber ot bonds received, if any, and any ulti- 
mate distribution oi the same, came to me as attorney tor the 
plaintiffs in the Eehoe case, under the seal of professional con- 
fidence. I cannot state anything in connection with the sub- 
ject, \vithout at least giving a link in the chain of evidence 
which must betray the counsel of my clients, which cam. 
my knowledge as their attorney. 1 do not mean to assert that 
anj r disclosures I might make would he prejudicial to my 
clients, or beneficial to them. I am not at liberty to disclose 
anything of any character, of which I became }M>ssessed, by 
reason of the fact that I was the counsel for the plaintiffs in 
the aforesaid cause, and only by reason ol that fact. 



November 24th, L871. 

Examination of Ool. E. G. Haywood, resumed. 

Q. It has been proved before the commission that 77 bonds 
of the A. T. & ( ). Railroad were received by you in the com- 
promise ot Kehoe against that company. Did you deliver 
these bonds to your clients, <>v how were they disposed oi bj 
vou '. 

A. 1 accounted for ail the proceeds oi' said suit which 
reached my hand, with John T. Deweese, my principal client, 
and disposed of the same, and all of the same, according to his 
instructions. T respectfully decline entering into the particu- 
lars of Mich disposition, for the reasons given in my previous 
answer. 

Q. State whether you were one ot the counsel in the 
case known as the University Railroad case, and whether the 
said rase was re-argued and all the circumstances connected 
with it as far as you remember. 

A. I was the original and leading counsel tor the plaintiff 
in what is known as the University Kail road case, and retained 
the firm of Fowle <fc Badger for the plaintiff. Our only clients 



1871-72.] Document No. 11. 4:45 

at the origin of .-aid suit were the directors of the University 
Railroad Company. The brief in such cause was prepared by 
Judge Fowle and myself in consultation. The case was argued 
before the Supreme Court by Judge Fowle alone, in the first 
instance, I being present lending my aid and assistance. Some 
few days after this agreement, I learned from some source in 
which I then had confidence, but from what quarter I cannot 
now say, that the opinion ot the majority of the court were 
adverse to the plaintiffs upon the validity of the bonds ordered 
to be issued to the University Railroad. About this time, or 
shortly after, I learned from Judge Fowle that the Court upon 
his motion, he representing generally other persons who were 
interested in other special tax bonds besides those of the Uni- 
versity Railroad Company, had consented to re-hear the gene- 
ral question involved in the University Railroad case, as to the 
constitutionality and validity of all the special tax bonds. We 
consulted together in reference to this re-argument. I doubted 
whether I should appear upon the re-argument as my under- 
standing was that the University Railroad case would be lost 
any way, and I had no retainer from any other quarter. I was 
vet undecided when I left my office for the court room on the 
morning fixed fur the re-argument, but in the rotunda of the 
capitol, I met Judge Person for the first time in connection 
with this business. He informed me he had arrived that 
morning from New York and had come for the purpose of 
taking part in the re-argument. I intimated to him that I did 
not intend to appear further in the case, as I had no retainer, 
and my clients must lose their case in any event. He then 
stated that he felt at liberty to contract on behalf of the Wil- 
mington, Charlotte & Rutherford Railroad Company, and he 
would guarantee me a lee oi one thousand dollars at any rate, 
and the details of any subsequent contract might be arranged 
thereafter. It was about the time of the convening of the 
Court, I think, Judge Fowle came up as Judge Person and 
myself were conversing. My impression is that he had seen 
Jndge Person before that morning. We all then went into 



446 Document No. 11. [Session 

the Court room together. Judge Person represented to the 
court, that he was fatigued from night travel and unwell, and 
asked as an indulgence! to him, that the re-argument might be 
postponed. I think the Attorney General for the defendant 
consented to such postponement, if it met the approval of the 
court. My impression is that the court in granting the indul- 
gence at first suggested a very earl} 7 day for the re-argument, 
perhaps the next day or the next day but one. but upon Judge 
Dick stating that it was necessary for him to go home about 
that time, and that he desired to be present at the argument, 
another day was fixed, perhaps a week or ten days later, at 
which time the case was re-argued, Judge Person openeing tor 
the plaintiff, and I concluding the debate. The result of the 
re-argument is contained in the records of the Court, and the 
"Reports of the Supreme Court ot North Carolina, (N. C. It. 63.) 
Judge Fowle was present and assissting at there-argument. I 
think he made no speech. Mr. Pou and the Attorney General 
represented the state on both arguments. I think some other 
counsel appeared for the defence. The general question ot the 
validity and constitutionality of special tax bonds, and the 
whole scope and meaning oi the constitution in reference to 
revenue, taxation and the power the legislature to contract debts 
on behalf of the state in any and every form, was discussed, 
both by the counsel for the plaintiff and the counsel for the 
defendant on the first argument, as well aa upon there-argument. 
In fact, the application for the re-argument by our client wa6 
based upon their and our idea, that the result of an adverse 
decision in the University Railroad case proper would be 
d< Btrnctive of all the special tax bonds issued by the Stale for 
tern North Carolina Railroad, tor the Wilmington, 
Charlotte and Rutherford Railroad, and for the Western 
Railroad. 

Q. State whal clients you represented upon the re argument 
of the case, what contract was made with them in reference 
to ■ tmpensation, and all the fi >nnected therewith. 

A. Within r day or two alter Judge Person's arrival, men- 



1871-72.] Document No. 11. 447 

tioned above ; perhaps the next day, Mr. T. II. Porter, of the 
firm of So-utter & Co., of New York, arrived in Raleigh, and 
was in consultation with Judge Fowle, Judge Person and my- 
self. Mr. Porter and Judge Person both concurred in the 
representation that Mr. Porter came here as the agent of the 
Wilmington, Charlotte and Rutherford Railroad Company, the 
two divisions of the "Western North Carolina Railroad Com 
pany, and the Western Railroad Company 1 and was authoiized 
on behalf of each and all these corporations to contract with 
us for fees to appear on the re-argument. I considered myself 
the counsel of the railroad corporations named above on the- 
re-argument. Before we re-argued, when Judge Fowle, Judge 
Person, Mr. Porter and myself were together at my office, [ 
suo-o-ested and insisted that our fees in the matter should bo 
settled, or at least decided upon. The other counsel concur- 
ring, we proposed to Mr. Porter that in addition to the one 
thousand dollars each, which we were to receive as a retainer. 
he should in behalf of the corporation which he represented, 
contract to pay us $5,000 each in addition, if we succeeded in 
so far affecting the Supreme Court as to induce them 
to take an advisari upon the question of the validity of the 
special tax bonds issued to these several corporations, so 
that the decision might be deferred till at least the eli- 
sions: term of the Court, and it we eventually sue- 
succeeded in obtaining an opinion from a majority of the Court 
favorable to the validity of the said special tax bends ; then, in 
addition to the above amounts, that lie should contract to pay 
us $50,000 each in the special tax bonds, issued to some one of 
said corporations. Mr. Porter stated that he must, of course. 
rely, to a great extent upon us in dealing fairly with him, and 
fixing the amount of our own compensation ; that Judge Pri- 
son was a director in the W. C. & K. Railroad, and their regu- 
lar attorney, and he relied greatly upon his judgment in the 
matter; that he was willing to assent to the first two branches 
of our proposition, but thought the last branch contained too 
high a demand. Without coming to any al solute conclusion 



14S Document No. 11. [Session 

as to this lael branch, Mr. Porter left us together for consulta- 
tion. In this consultation I insisted upon adhering to our first 
demand, stating that the amounts involved were very large, 
that the contingency upon which each oi us was to have the 
$50,000 in bonde was very remote; that the duty imposed 
upon us was onerous, responsible and unpopular, and it the 
railroad corporations should succeed in establishing the va- 
lidity of said bonds, they could, among them, well afford to 
pay the price. I was, however, overruled by the other two 
counsel, and it was eventually agreed amongst us, that the propo- 
sition for the /oOjOOO each in bonds, should be changed to 
$25,000 each in bonds. We parted with this understanding. 
Xcxt morning Mr. Porter paid me a thousand dollars, and 1 
learned from Judge Person that Mr. Porter had assented to 
our proposition, with the variation finally agreed upon. The 
contract was not then reduced to writing. "We were pressed 
for time, preparing for the argument, which came on almost 
immediately afterwards. On the evening of the day on which 
the case was finally re-argued, and shortly after we left the 
court room, Judge Fowle, Judge Person and myself met at the 
office of Fowle ifc Badger, and concurring in the opinion that 
our contract with Mr. Porter ought to be reduced to writing 
before the decision of the Court was pronounced, we proceeded 
to reduce it to writing. I think at about substantially the terms 
suggested above. .My impression is, that Judge Person wrote 
the agreement, we all being present and suggesting the terms 
from time to time; and that as lie was staying at the Varboro* 
House, where Mr. Porter also boarded, the written paper was 
left with Judge Person, with the understanding that he would 
procure Mr. Porter's proper signature thereto. My impression 
is thai Judge Person, after going to the Yarborough Souse 
with the papi . urned to Judge Fowle' i Bee, and stated 
that Mr. Porter had taki paper, and desired time to 

examine it. and had instructed him to request us to meet him, 
(Mr. Porter, togethi r with Ju P rson, at Mr. P.'s room a*. 
the Yarborougb FIou6e. V cordingly all met there thai 



1871-72.] Document No. 11. 449 

night, and after remaining together and talking the matter over 
for an hour or more, the contract was finally signed by Mr. 
Porter as agent for and on behalf of the corporations referred 
to above. My impression is that the contract wab then left 
with Judge Fowle for safe keeping, and I do not think I have 
seen it since. On reflection, I am uncertain whether my re- 
taining fee of one thousand dollars was paid before the re-argu- 
ment, as stated above, or was handed to me by Mr. Porter, 
duing the interview just indicated. I know, however, that 
the terms of our agreement were fixed before the re-argument. 
Alter the decision was pronounced by the court in the matter 
referred to, I gave Judge Fowle, I think, in writing, some few 
weeks after said decision — understanding that he was going 
to New York for the purpose, by arrangement between Judge 
Person, Judge Fowle and myself — authority to settle with Mr. 
Porter for my portion of the fee. Judge Fowle left for New 
York. After remaining away a week or two, he returned to 
Ttaleigh, and handed me $25,000 in special tax bonds, and 
accounted to me for $5,000 in money, all of which he repre- 
sented himself to have received from Mr. Porter as my por- 
tion of our fees. 

Q. Did Mr. Porter say anything about paying anything 
additional on account of himself or other parties in New York ? 

A. I did not understand that we were connseVfor any but the 
parties named above. In the course of our conversation about 
the terms of the contract, at my office, as stati i I >ve, it was 
suggested that we might get the decision of f 1 valida- 

ting the special tax bond-. T think Mr. P ually 

remarked about to this effect : "If such leeisi be ol 

tained, our house would pay you an additional fee." ' lid not 
regard it a . . i ^] X ' ]A j 3 a00 ut all T ' 1 on 

the subject. T never made any demand 
proposition, and 1 never received an; 
growing out of it. 

<}. Do you know, or did 
he paid to any ineml tl ' bond 

29 



4.~>t) Document No. 11. [Session 

money, or that he had made any bargains of any kind with 
any cue of them to procure a favorable decision of this case? 
It so, state fully all the facts which have come to your know- 
ledge connected with the subject of this enquiry. 

A. I have no knowledge of Mr. Porter ever having paid any 
member of the Court anything in connection with said suit, nor 
did he ever tell me that he had ever done such thing, nor did 
he ever state to me that he made any bargain with any mem- 
ber of the Court in reference to said suit, nor have I any 
knowledge of any such bargain ever having been made by any 
person ; nor did Mr. Porter or anyone else give me any infor- 
mation from which I could draw any such deduction as is sug- 
gested above. 

ED. GRAHAM HAYWOOD. 

Sworn to and subscribed before the Commission. 



November 1 7th, 1>7!. 

Mr. T. F. Lick was called, sworn and testified : 

Q. Can you give any further information of matters conn. 
ted with the Kehoe injunction case than appeared in your tes- 
timony before the Bragg Committee, or has anything come to 
your knowledge since that examination \ 

A. I do not think I can add any material information to 
what T have already stated, nor has anything of any impor- 
tance since come to my knowledge. 

Q. Do you know what became of the remainder of the 77 
bonds after deducting those given to Askew, Fowle and 
Badger and Judge Watts, to wit : 40 which were left in tin* 
hands of Col. Haywood ? 

A. I was informed by V idler, Treat & Co., bankers in Now 
York, that Col. Haywood had bonds of the Atlantic, Tonnes 
sea <k Ohio Railroad then for sale with them, but the number 
[ do not know. This was about the last of September, 1869. 



1871-72.] Document No. 11. ±51 

I think they told me afterwards they had sold Col. Haywood's 
bonds at 35 or 40 cents, with 7-J per cent, off, to cover back 
interest or something of the kind. 

Q. You have stated in your examination before the Bragg 
Committee, that you realized from (he sale of yonr bonds 
$1,500, and that yours and the 5 bonds belonging- to Judge 
Watts were placed in the hands of the same bankers in your 
name. Please state to this Commission if any portion of the 
said sum was paid to Judge Watts, and give full information 
of the negotiation for the sale of said bonds. 

A. There was none of the amount received paid to Judge 
Watts. I gave positive instructions to the banking house to 
sell ten of the bonds for the best figure they would bring. The 
other five were to be negotiated for, but not to be sold until I 
had furnished instructions. In the meantime I communicated 
with Judge Watts and informed him of the terms of sale. 
Before getting a positive reply from Judge Watts, I drew 
$1,500 on account of sales. My best impression is that 1 after- 
wards got authority from Judge Watts to let them go at the 
price I got for mine. I know they were sold, from information 
I had from one of the firm. The morning after the sale, I 
called at the banking house to draw the balance of the money, 
when I found that the house had failed and closed, and I got 
nothing more. 

Q. Do you know, or have you any information, of any 
mon.\y, bonds, proceeds of bonds, or any thing of value, being 
given, offered or loaned to any member of the Legislature, or 
Convention, or to any officer of the State, or to any officer of 
any railroad in which the State has an interest, to influence him 
to procure the passage of any bill or ordinance through the 
Legislature or Convention, making appropriations to railroads, 
or for other purposes, or to influence his official action in any 
way whatever ? 

A. To the befct of my recollection, I have no information on 
the subject, nor do I know any thing of my own knowledge. 

T. F. LEE. 
Sworn to and subscribed before the com mission. 



'■'>- Document No. 11. Session 

Raleigh, November 20, 1871. 

Mr. \Y. F. Askew, appeared before the commission, was 

.sworn and testified : 

Q. It has been slated to the Commission that you were one 
of the parties who employed counsel in the Kehoe injunction 

suit, or were interested in the same. Please state the facts with 
regard to you connection, if any, in the suit, and any thing 
within your knowledge connected with the settlement of the 
compromise. 

A. I had nothing to do with bringing the suit. J did not 
know that it had been brought, and employed no counsel. T 
had no conference in regard to bringing it. I had no acquaint- 
ance whatever with Kehoe, the plaintiff in the suit, and don't 
know him to day. I have never been introduced to him. ] 
did not become a party to the suit with my knowledge or con- 
sent. I received ten bonds, as stated before the Brass com- 
mittee, from Mr. Haywood for services rendered in the com- 
promise ot the suit, and I had no further interest in, or connec- 
tion with the matter whatever. I do not know how the bonds 
received were divided. 

Q. When did you first take any part in this suit, and at 
whose request? 

A. A lew day.- after tl ght, Mr. McAden came 

to me and asked me to see Col. learn from him 

who brought the suit, and if iL was brought ... 

the latter, and learn if he would m !en 

said it wa. iling suit. Thi dge 

the 
.-Hi -j ' Ct. ] I 

tion with him 

i 
suit, but in I 

; 



1S71-T2.J Document No. 11. 45?. 

asked me to write so to Mr. McAden, which I did in my own 
name, and upon the receipt of Mr. McAden's reply. I showed 
it to Col. Haywood. 

Q. Do you know whether Judge Watts, Mr. Kehoe or 
Deweese received any of the bonds which were given to Col. 
Haywood for the purpose of effecting the compromise ? If so 
state all you know about it ? 

A. I heard nothing ot the kind from either of the parties or 
Col. Haywood, and knew nothing of my own knowledge. I 
have no knowledge or recollection that Col. Havwood ever in- 
formed me, or intimated to me in any way, the number of bond* 
he received. • < 

W. F. ASKEW. 

Sworn to and subscribed before the commission. 



Raleigh, Nov. 20th, 1371. 

Mr. I. J. Young appeared, was examined and testified : 
Q. Did you sign the injunction bond for It. C. Kehoe a> 
security in the suit of R. C. Kehoe against D. A. Jenkins and 
the Atlantic, Tennessee and Ohio Bailroad ? If so, state the 
circumstances under which the same was done, what was 
said to you by the party requesting you to sign the bond, and 
all the facts connected therewith. 

A. I did sign it at the solicitation of John T. Deweese. 
lie came to my office in the city of Raleigh, (then near the 
post office,) and said he wished to commence a suit against the 
Atlantic, Tennessee & Ohio Railroad to prevent the issue of 
cer' ' ' Is by the treasurer of the State for that road, and 
hedmetogo security on the injunction bond. I askep 
time for consideration and consultation. lie assured me there 
was no danger, and referred me to Col. Havwood and R. C. 
Badge.'. '" . I saw Mr. Badger, who thought I would incur 
no d ■ in signing the bond. I subsequently went to Col. 



454 Document No. 11. [Session 

Hay wood's office with both Deweeee oc Badger. I asked 
Col. Haywood to step out of doors, and consulted with him 
regarding the danger of signing. He assured me there was no 
danger, and said he would guarantee for a hundred dollars 
assure me from harm, which I regarded as a manifestation <<\ 
his confidence in the strength (it* his belief, and I then consen- 
ted to sign the bond, and went from his cilice to the Court- 
house, together with Badger and Deweese, and I think 
kehoe, and did sign the hond. Deweese said that he thought 
the issue ot the bonds unconstitutional, and intended to pre- 
vent it it" he could. 1 objected to signing, as I wished to do 
nothing involving my personal responsibility, and 1 regretted 
it, because of Ins kindness to me. He then offered to deposit 
with me an acceptance from Gr. W". Swepson for $2,500 or 
$5,000, but I think the latter, to indemnity me against loss. 1 
did not receive the acceptance, and told him if I signed it at 
all, it would be <»f my own tree will and with such guar- 
antee. 

Q. Please state to the Commission why the name of Ii. C. 
Kehoe was substituted and used instead of that of Deweci 

A. I do not know. I was informed that Deweese was party 
to this suit, and was afterwards informed it was Kehoe. 

Q. Was it not understood at the time, that the suit would 
have to he brought in the name of a tax-payer, and t fiat 
Deweese did not answer that description \ 

A. I was at Col. Haywood's office but a Bhort time, and did 
not hear any such understanding; I did not hear any such Bug 
gestion. I understood up to the timeofgoing to Col. II. V 
office, that it was the suit of Deweese. 

Q. Did Deweese say, or intimate to you at any time, that 
this suit was brought for the purpose of forcing a compromise, 
or of obtaining compensation for certain claims which he had 
against the officers of the road, or for the purpose "i" making 

money out of the road by this means in some way '. 

A. After the suit was Fettled, he told me in a conversation 
in the city of Washington, that a large amount of bonds, (over 



1871-'72.] Document No. 11. 455 

$100,000) had been paid to compromise the suit, and that it 
had been compromised, and that I was in no danger. That was 
my object in inquiring the condition oi the suit. In that con- 
versation he complained that he had not received his portion 
of the bonds paid in that compromise, but did not state what 
his part was, nor from whom lie expected to receive it, and he 
did not state then, or at any other time to me, that his object 
in having the suit brought was different from what he first 
stated, when he asked me to sign the bonds, that is, to prevent 
the issue of the bonds to the road. Upon my return home, 
being surety to the suit, I inquired and found that it had been 
compromised. Not long afterwards, a bill of costs in the suit 
was presented to me by deputy sheriff Buck, for about $10. 
L asked him to hold it up until I could write to Kehoe, and 
ask him to pay it. I did write, but got no reply, and after- 
wards, upon its again being brought to my office, I paid it, and 
have never been re-paid. Nothing was offered to be for becom- 
ing surety for the prosecution of the suit, and I received no 
part of the proceeds of the compromise, either directly or indi- 
rectly. 

Q. State, if you know what became of the bonds paid in 
the compromise of the suit, and any party who received them, 
or any portion of them. 

A. I do not know what became of them. I never saw one 
of them in my life. 

Q. Did you have any conversation with It. C. Kehoe in 
regard to this suit ? If so, give the substance of it. 

A. I asked Mr. Kehoe to pay the bill of costs I had paid 
to the Sheriff. He declined doing so, saying that Deweese 
ought to pay it. Nothing was said on either side about his 
receiving any bonds. 

Q. Do you know, or have you any information of any 
money, bonds, proceeds of bonds or anything of value being 
given, offered or loaned to any member of the Convention or 
Legislature, or to any State official, or to any officer of a rail- 
road in which the State has an interest, to procure the passage 



4:56 Document No. 11. [Session 

any bill or ordinance through the Convention or Legislature, 
king appropriations to railroads or for any other purpose, or 

t his official action in any way, whatever '. 
A. I do not. 

j. j. FOUNG. 

iSworn to and subscribed before the Commission. 



Raleigh, November 21st, L871. 

Mjp. li. C. Badgee appeared, was sworn and testified. 

Q. Were you one of the plaintiffs' attorneys in the suit of li. 
C. Kehoe against 1). A. .Jenkins, Public Treasurer, and the A. 
T. &O.R. R.Co.?. 

A. I was as a member of the firm of Fowle and Badger. 

Q. Please state by whom you were employed, and if there 
were other parties engaged in the prosecution of that suit be- 
sides R. C. Kehoe? If so, please give their names? 

A. I know of no one in connection with the suit except J. T. 
Deweese, until it was about to be brought, when Deweesegave 
me the name of P. C. Kehoe as plaintiff in the action, assigning 
some reason for that which I do not now remember, but which 
was satisfactory at the time, and I think he was to pay Kehoe 
for allowing the use of his name. 

Q. Please state how the said suit was settled and upon what 
terms, and when ; all the facts connected with the institution 
ot the suit, and its settlement BO far as {they came to your 
knowledge '. 

A. About the 20th of June 1869, which date I take from the 

statement of Judge Fowle before the Bragg commission, the 
firm of Fowle and Badger, <>f which 1 was one, was employed 
in connection with Col. E. <i. Haywood to institute a suit to 
restrain the Public Treasurer from Issuing s2,<>oo,oix) bonds of 
the State to the A. T. & ( ). Tv. R. I understood at the time 

our linn was employed, that certain parties wlm would have the 



1871-'72.] Document No. 11. ±61 

control and management of the bonds if issued, had made a con- 
tract with him, and were indebted to him in a very large sum 
of money, that the parties (I don't remember that he mention- 
ed the names,) would not comply with their contract or pay 
him his money ; that the contract was such that he did not be- 
lieve he could enforce it at law, and he therefore took this 
method of enforcing its payment, and was willing to pay hand- 
somely in fees of the sum that might be recovered for him. 
The suit was brought in the name of 11. C. Kehoe, at the in- 
stance of J. T. Deweese. How long it was pending, I do not 
now recollect, but immediately proceeding its settlement, I 
think the day before, Mr. T. F. Lee came to my house, and 
asked me to walk down to his house with him. When there 
he proposed to compromise the suit. I asked him what his 
connection was with it. lie declined to tell me. I asked this 
question, as I had not heard of him in the matter before. 1 
informed Lee that I had no authority whatever, to settle the 
suit, and if he had any propositions to make, to come to my 
office next day, and I would have Col. Haywood and Judge. 
Fowle present. Whether he came or not, I have now forgotten. 
My impression is that I next met him at Col. Haywood's office 
on ihe following night, at which time I was informed, by whom 
I do not recollect, that Mr. Lee represented R. Y. McAden, 
one of the directors of the company and was acting as its attor- 
ney. I recollect that once or twice during the continuance of 
the suit, upon a suggestion, I think made in the newspapers 
that it was a black-mailing suit, Judge Fowle and myself re- 
ceived assurances through Col. Haywood, from our client Mr. 
Deweese, that such was not the case. And on the night above 
referred to, when T met Mr. Lee at Col. Haywood's office, Judge 
Fowle being present, I n lect distinctly that Judge Fowle 
.-peaking for one firm, refused to have anything to do with the 
compromise proposed by Mr. Lee for Mr. McAden, unless he 
could get the same assurance that it was nol a black-mailing suit 
from Mr. McAden himself. Mr. Lee Baid b Id go and sec 

Mr. McAden about it. He went out and in a short while re- 



I ><x i m !.m No. 11 [Session 

turned, and said that Mr. McAden authorized him to state that 
Buch was not the ease. I do not think that I was present when 

the terms of settlement were agreed upon. I went, I think the 
next morning in company with Mr. Lee to Franklinton to pro- 
cure a dissolution of the injunction by Judge "Watts. It was 
originally agreed that I should go alone, but I insisted upon 
some party going, representing the defendants, and Mr. Lee 
went as Mr. McAdcn's agent as I was'informed. Judge Watts 
dissolved the injunction upon my assurringhim for the plaintiff 
and Mr. Lee for the defendants, that both parties desired it. 
About that time, J think the next da}', t Colonel Haywood 
delivered to our firm sixteen bonds, of which I received 
nne half. I don't know what became of the balance of 
the bonds. I sent my eight bonds to New York for sale, but 
was informe I by my broker that they had not been placed on 
the 6tock board, and that, there was no sale for them except at 
a diminished price; I therefore ordered them to be held. 
Sometime thereafter, how long I don't know, I became satis- 
fied thai 1 had no just title to the bonds, because the suit had 
not been instituted by Deweesefor the purpose mentioned by 
him, but had been brought by a combination of men to whom 
the A. T. & (>. It. R. was not indebted at all; I therefore 
ordered a recall of the bond.-, and when fully satisfied that 
the\ were the property of the railroad company, returned them 
to the President. 1 have meant by a black-mailing suit in all 
my preceding testimony, an action brought by Peweese to 
recover that to which he was not entitled. My impiession. 
though I was not fully informed as to the suit from its begin- 
ning to the end, was, that Deweese had made some contract 
with the railroad company or its officer.-, by which he was to 
receive a large sum of money, in consideration of assistance 
renden d by him in the passage of the act lor the issuance of 
the bonds; that the company or its officers had refused to 
comply with that contract, and he was determined by this 
action to compel it.- enforcement After I became aware that 
my title to those bonds was doubtful, I received an oiler of 



1871-72.] Document No. 11. 4M> 

forty cents in the dollar for them, which I declined, because 1 
was not satisfied of my title 

Q. State, if you know, what became of the other 61 bonds 
left in the hands of Col. Haywood ? 

A. T know nothing in regard to them, except that Col. Hay- 
wood stated when he delivered the 1G bonds to our firm, 
he had retained 16 as his fee, which lie intended to sell, and 
that he would write to Deweese as to the disposition of the 
balance of them. [ have information of the disposition of 5 
other bonds, which information wasgiven me by Judge Watts, 
and is substantially the same that he has stated before the 
Bragg committee. This information T received at the tail term 
oi Halifax court, 1869, subsequent to the settlement of the suit 
by the disolution of the injunction above referred to. 

Q. State all the information you have in reference to the 
argument, re-argument, and final decision oi the University 
Railroad case, and all the circumstances connected therewith, 
according to the best of your recollection. 

A. The Sunday I think after the argument of the University 
Railroad case, I met Judge Pearson on Faj-etteville street in 
front of the Courthouse, and asked him if the Court had decided 
the case? He said that it had, adversely to the plaintiffs. He 
complimented Mr. Pou for his argument, and said that Judge 
Rodman had written an opinion in the case in which he con- 
curred, as I understood him. Whether Judge Pearson re- 
ferred to the case of the University Railroad alone, I do not 
know, and did not then, nor did I know the extent of the deci- 
sion that he referred to. I was not one of the counsel who 
argued the case, nor do I think I heard it argued. I commu- 
nicated this conversation to my partner, Judge Fowle, and 1 
think he telegraphed the same to New York, to whom, I do 
not now recollect. J think that in answer to that telegram, 
there came a telegram from New York from the officers of the 
\V. C. & R. P. P. Co., asking that the case might be postponed 
until it could be argued by their counsel, Judge Person, and 
that motion was made in the Court to that effect by my partner 



4G0 v Document No. 11. [Session 

Judge Fowle, which motion wa6 granted, an< 1 the case was re- 
opened. I received as ray part Oi the: fee, oi the firm of Fowle 
& Badger, $12,500 in the bonds of the W. N. C. R. R. W. D., 
and |3,000 in cash. I was not present when the contract was 
made with Mr. Porter, but I think he professed to represent 
all the North Carolina Railroad Companies having .special tax 
bonds in Xew York for sale. 1 have an impression that sub- 
sequently it was >tated by some of the parties, that Dr. Mott 
and A. J. Jones refused to pay any share of the lee. I do not 
know that any money or bonds were used to effect a change 
in the opinion ol the court, and I have no information what- 
ever leading to that belief. 

Q. State what was your understanding of the extent of the 
decision by the Court ; when the telegram was sent by your firm 
to New York, and whether you understood there was any 
change of opinion on the part of the court many member thereof, 
after the re-argument, and it so, on the part of what member or 
members '. 

Q. My understanding was that the decision of the Court wae 
adverse to the special tax bonds — all of them. T based this 
"pinion upon what I understood to have been the line of arg 
ment, at the first hearing of the cause, to wit : that the whole 
question ot the validity ot the special tax bonds had been gone 
into in the argument. I do not know whether the opinion of 
the Court, to which Judge Pearson referred, was with regard 
to the University Railroad case alone, or whether it. referred to 
the whole of the special tax bonds, but my impression was to 
the latter. My impression was that a majority of the ( Jourl Was 
adverse to the validity of all the special tax bonds. From their 
opinion in the Chatham Railroad caee, I was satisfied thai 
Justice- Reade and Settle were favorable, and the other thre< 
Judges were adverse. Bui these are all impressions, formed 
as above stated, and nothing more. 

Q. Do you know or have you any information oi any money, 

bonds, proceeds of bonds, or anything of value being given, 

re 1 oi- loaned to any member ot the Convention or Legis- 



1871-72.] Document No. 11. 461 

Iatnre, or to any State official, or to any officer ot any Railroad 
in which the State has an interest, to procure the passage of 
any ordinance or hill through the Convention or Legislature, 
<>r for any other purpose, or to influence their official action in 
any way whatever? 

A. T do not. 1 have no knowledge or information. 

It. C. BADGER. 

Sworn to and subscribed before the Commission. 



Raleigh, November 24, 1ST 1 . 

lion. D. G. Fowle appeared, was examined and testified as 
follows : 

Q. Do you know any further facts connected with the Kehoe 
suit, not mentioned in your testimony before the Bragg com- 
mittee? 

A. Nothing, except that immediately after the adjournment 
of the legislature for L870, T sent to Col. Johnson, president ot 
the Atlantic, Tennessee and Ohio Railroad Company, an order 
for the eight bonds that I had received as a fee. The eight 
bonds were delivered, I understand, upon that order, to Col. 
Johnson. 

Q. Please give the Commission all the information you have 
in relation to the argument, re-argument and decision of the 
University Railroad case, before the Supreme Court, and all 
the circumstances connected therewith, to the best of your 
recollection. 

A. The firm of Fowle and Badger were employed for the 
plaintiffs in the suit of the University Railroad Company, 
against Ilolden and others. I argued the case for the plaintiffs 
at the first hearing. Col. Haywood was present, but did not 
speak. After the argument on Monday, I think, my partner, 
Mr. Badger, stated to me in our office, Col. Haywood I think 
being present, that from a conversation he had had with Judge 



462 D«cdmisnt No. 11. [Session 

Pearson, lie was satisfied we liad 1 » >.- 1 the suit. On the nexl 
night (Tuesday) I received a despatch from 6. W. Swepson, 
dated Baltimore, retaining me as counsel to have the case 
re-opened for argument, and promising me a liberal tee, if I 
succeeded. After this 1 received a telegram from New York 
fr.mi Judge S. -J. Person, retaining me as counsel for the Wil- 
mington, Charlotte and Rutherford Railroad Company, and 
asking that 1 would move the court to re open the case so that 
he might be heard. The telegram farther stated that he had 
telegraphed Judge Rodman, asking that the ease might '«• 
re-opened, and that he (Person), as counsel for one of the roads 
(W. C. & 11. \l.) might he heard, and that Judge Rodman 
would show me the telegram. I called nj>on Judge 1J. and 
stated wdiat Person had telegraphed me. Judge R. said, "yes, 
lie had received a telegram from Judge P., and that 1 could 
see it." It was lying upon his table, lie took it up and 
handed it to me. It was in snbstance as follows : " I move the 
court to re-open the railroad case so that I may be heard as 
attorney for the Wilmington, Charlotte and Rutherford Rail- 
road." Judge Person's name was attached to it. Very soon 
thereafter, the same afternoon i think, I met Judge Pearson, 
and stated to him that the railroads interested in the decision 
who had not been represented at the argument, desired to be 
heard. The judge replied, "Make your motion in court, sir." 
This conversation occurred on the street near the court house. 
I made the motion in court, and the case was re-opened. I 
charged as a fee the sum of $2,500, which was subsequently 
paid me by ]\I r. Porter. This sum, $2,500, had been agreed upon 
by several ot the leading legal firms of Raleigh as the minimum fee 
in such cases. Judge Person, I think, arrived in the city on Fri 
day morning. Col. Haywood's statement, which has been 
read to me, is substantially correct as regards the contract 
between him (Porter) and the attorneys of several railroad 
companies in relation to tecs. As soon as the opinion was 
tiled in the case, T telegraphed to Mr. Porter its substance. 
A week or two afterwards, at the request of Judge Person and 



1871-'72.] Document No. 11. 468 

Col. Haywood, I went to New York for the purpose of receiv- 
ing our fee from Mr. Porter. I had powers of attorney from 
Jndge Person and Col. Haywood to receive their portion. 
Mr. Porter paid me $15,000. I accounted to Col. Haywood 
for §5,000 to Judge Person for $5,000, and to my partner, P. 
C. Badger, $2,500, retaining $2,500 for myself. I also received 
25 bonds of one thousand dollars each issued to the Wilming- 
ton, Charlotte & Rutherford Railroad for Judge Person, and 
deposited them to his credit with Soutter & Co. I received 
also 25 bonds issued to the Western North Carolina Rail- 
road, Western Division, which I handed to Col. Hay wood, and 
25 of the same issue, 12 of which I gave to my partner, Mr. 
Badger, and retained 12 for myself. The proceeds of the 
remaining bond, which was sold. I divided between Mr. Badger 
and myself. Mr. Badger, whose evidence I have read, was 
mistaken in supposing that 1 telegraphed to Mr. Swepson the 
rumor of the conclusion to which the court had arrived after 
the first hearing. There had been no communication between 
Mr. Swepson and myself in regard to this matter until he tele- 
graphed me from Baltimore, as stated above. My statements 
as to the days, &c., on which these different transactions occur- 
ted is from recollection only, and it is probable I may be mis- 
taken in regard to the exact time at which the events spoken 
of occurred. The impression which Mr. Badger conveyed to 
me as to the conclusion of the majority of the court previous to 
the second argument was that the equation of taxation whs 
established and applied to all bonds which were authorized to 
be issued since the adoption of the new constitution. I had no 
conversation with Judge Pearson in regard to the matter, 
except as stated above, during the pendency of the suit. 
Neither do I know of any communication between Mr. Porter 
and any member of the court. 

DA^'L G. FOWLE, 
Sworn to and subscribed before the Commission. 



464 Document No. LI. [Session 

I! kLEiGH, Nov. 25th, L871. 

Hon. Samuel W. Watts appeared and was examined and 

testified as follows : 

(). What disposition was made of the 5 bonds received 
by you from T. F. Lee ? Did you receive any tiling for them '*. 
Were they sold on your account and for yon % If so, by whom, 
and what became of the proceeds? 

A. As I stated before the Bragg Committee, Tim Lee came 

to me at the Court House ; he met me in the entry and I went 

with him into the Sheriff's room. He then informed me that 

he had a package for me which he said was bonds, and which 

had been handed to him by Col. E. G. Haywood from J. T. 

Deweese. He stated that he was going to New York and he 

said he would sell them. I told him he might do so, and I 

would settle with Deweese for the proceeds, in according with 

the contract between him and myself, as stated in the report 

of the l>ragg committee. The bonds were not sold on my 

account. I understood from Lee that lie carried them to New 

Fork and deposited them with Fuller, Treat & Co., together 

with bonds which he himself had for sale. How he sold them, 

or whether he sold them, I do not know. Afterwards, Lee 

told me had not sold them. Sometime afterwards I saw Col. 

Haywood at Franklinton on his way to New York. In the 

course of conversation. Col. Baywood remarked that a house 

wi New York in which he had a large amount of bonds had 

I that he was ruined. lb- spoke oi Lee being in 

v ' 5l '. I then told him that Lee had with him the .bonds 

Mr. Deweese and 1 requested him to look after 

1 T think 1 raphed I. I" that effect. I heard 

f ! about the Hale of the bonds, either by tel- 

ive him no instruction by telegraph 

sturn t b. AVhen 1 n 

': me • he house with whom he had 

\ !' iled, and that nothing had 
m. When Col. Ha; 



1871-72.] Document No. 11. 465 

returned, he showed me an account of sale of bonds in the 
name of Lee, which I did not examine particularly. He also 
showed me a note made payable to Lee by the banking house 
before mentioned, to a large amount, which amount I do not 
remember. I never reeeived anything, directly or indirectly, 
on account of these bonds, either from Lee or any one else. 
I think the note mentioned was for $1,300 or thereabouts. T 
have never had the note, or any other note of Lee or any other 
parties in this connection. Lee proposed afterwards to give 
me a note conditional upon his receiving anything from the 
banking house before mentioned, which I declined to take. 

Q. Did you at any time have any conversation with Deweese 
or any one else in regard to the injunction suit known as the 
suit ot Kehoe vs. D. A. Jenkins and the A. T. & R. R. Co. 
A. No, never. 

Q. Do you remember the circumstances attending the disso- 
lution ot the injunction, and what was said by the parties en- 
gaged in obtaining it ? If so, state what you can about it. 

A. I do not remember particularly. The parties claiming 
to represent each side of the case came betore me and pre 
sented their papers and stated their case, and I ordered the 
dissolution asked for. 

Q. It was stated in the testimony of T. F. Lee, before the 
Bragg committee, that he had received a note from you in 
reference to these bonds. Please state the substance of the 
note, if you wrote such a one at all ? 

A. While holding Court at Louisburg, at the Fall Term of 
1869, I received a note from T. F. Lee requesting me to come 
to Raleigh, that he had some matters of interest tor me. I 
replied to that note, stating that my family was sick and I could 
not come, and asked him to attend to the matters of interest 
tor me. There was nothing in my note relating to bonds of 
indicating anything of the kind, or in his note cither. 

S. W. WATTS, J. S. ( . 
Sworn to and subscribed before the commission. 
30 



Dooombnt No. 11. [Session 

Raleigh, Nov. 28th, 1S71. 

Mr. R. C. Kshoe appeared before the Commission and was 

sworn, and testified as follows : 

Q. Were yon the plaintiff in the suit known as the suit of 
\l. C. Kehoe vs. D. A. Jenkins, Public Treasurer, and the 
Atlantic, Tennessee 6c Ohio Railroad Company '( If so, state 
all the the circumstances connected therewith, to the best of 
your recollection ? 

A. I am the plaintiff of record in said suit. I live in the 
town of Newbern. I knew nothing about the beginning of 
the suit, until I was approached on the subject, in the city of 
Raleigh, by John T. Deweese, a day or two before the bonds 
were signed, which was on the 25th of Juno, 1869, as well as 
[ remember. I was in Raleigh about that time, as well as I 
recollect. Mr. Deweese approached me, and remarked that 
he was opposed to North Carolina being swindled any longer, 
and asked if I was a friend to Mr. Sweet and Seymour, who 
were members of the Legislature at that time and who opposed, 
as I understood, the further issue of bonds. lie said to me in 
that conversation, that in order to restrain the issue of these 
bonds, it was necessary to obtain an injunction, and in or order 
to do that, to use the name of a tax payer ; I was a tax payer 
and he was not, and he asked me if I would allow mv nana to 

■I 

be used as Mich. I consented to that, and I went to Colonel 
Haywood's office, and found the papers already drawn up when 
[ reached there. This was a day or two after I had the first 
conversation with Deweese. I signed the bond for the prose- 
cution of the suit, with I. J. Young as security. lie signed it 
without my request; nor do I know at whose instance he did 
it. I also signed the injunction bond. The record shown me 
is correct, I have no doubt, but I do not recollect the dates 
Accurately. Deweese paid the clerk's fees, lie asked me if I 
would not pay them, which I refused to do. 

I knew nothing more about the suit until about three months 
afterwards, when I received a letter from Col. Haywood, asking 



1871-72.] , Document No. 11. 467 

me to come up to Ealeigh. I came up to Raleigh, and I was 
informed by Col. Haywood that the suit had been compromised. 
I asked him how, and upon what ground ? He said that Dew- 
eese had compromised it, but did not tell me how. He said 
he had received a number of bonds, but how many I do not 
remember. I think he said he kept 25 or 35 for his own ser- 
vices, but I do not certainly remember ; that he had sent some 
to Deweese, and had more in his office to send him, I think 
12 ; I received 4, which he said was all Deweese said I was 
entitled to. 

Haywood stated in his letter, mentioned above, "destroy 
this." I think it is still in my office in Newborn. Upon 
reflection, I think I returned the letter to Col. Haywood when 
I came to Ealeigh. 

Q. What disposition did you make of the four bonds re- 
ceived by you, and do you know how the bonds received by 
Haywood, Deweese and others, were disposed of? 

A. I hypothecated the four bonds in the National Bank at 
Newbern, for one thousand dollars. I afterwards redeemed 
them, and later I sold them to a Mr. Patterson, of Newbern, 
for eight hundred dollars, and I do not know what has since 
become of them. I know nothing ot those received by Hay- 
wood, Deweese and others. 

Q. Was there any understanding between you and Deweese 
or other persens, before the beginning ot that suit, that it should 
be prosecuted for the purpose of forcing a compromise, or was 
there any understanding that the proceeds ot such compro- 
mise should be divided between you and him and other parties? 
If so, state all the facts fully. 

A. Deweese in that first conversation said nothing to me 
about a compromise, nor was anything said about a compro- 
mise until after the suit was brought. A day or two day after 
the suit was brought, Deweese came to me, and asked me what 
I said about compromising it? I said I was opposed to any 
compromise in that business. Nothing passed between us 
afterwards until the suit was compromised. I then wrote to 



468 Doccmknt No. 11. [Se66io» 

Deweesc, Imt received no answer from him. All that I know 
about the division of the proceeds of the compromise is what 
Col. Haywood told me, as mentioned above, and what I learned 
afterwards was from him also. T had no understanding what- 
ever with Deweese regarding the division of proceeds. 

Q. Did you pay the costs of the suit ? 

A. I did not. 

Q. Do you know or have you heard of any money, bonds, 
proceeds ot bonds, or anything of value being given, offered or 
loaned to any member of the Legislature or Convention, or to 
any officer of a railroad in which the State has an interest, to 
influence their action in procuring the passage of any bill or 
ordinance through the Legislature or Convention, making ap- 
propriations to railroads, or to other objects, or to influence 
their official action in any May whatever ? 

A. I know nothing of the kind. 

ROBT. C. KEHOE. 

Sworn to and subscribed before the Commission. 



Raleigh, Dec. 5th, 1871. 

Col. Wm. M. Johnson, appeared before the Commission, and 
wa> sworn and testified as follows : 

Q. Did you receive the bonds or any oi them, loaned or ap- 
propriated to the A., T. & 0. Iv. RJ If so, give full infor- 
mation to the Committee on the subject, and state any other 
matter within your knowledge of the disposition of these bonds, 
and anything you may know of the compromise and settlement 
of the suit commonly known as the suit of K. 0. Kehoe, vs D. 
\. Jenkins and the A., T. & O. R. II. 8 

A. I would refer to my examination betore the Bragg com- 
mittee as an answer to the first branch of the question as to 
the number of bonds received. Since the report of that com- 
mittee was made, 1 have received 16 bonds voluntarily re 



1871-72.] Document No. 11. 460 

turned by Messrs. Fowle & Badger, which have been handed 
over to the Treasurer. I know nothing of the disposition of 
the other bonds except as reported by Mr. McAden tome, and 
as stated by him in his evidence before the Bragg Committee 
and his report to the Governor and Superintendent. The act 
authorizing the exchange of bonds was passed Feb. 3rd, 1869. 
Shortly after the passage of the act, I applied to the Treasurer 
for the delivery of the bonds. After several ineffectual efforts 

mi 

to get them, and not being able to do so, the Treasurer giving 
various reasons for delay, and believing that I could not get 
them before the value of the bonds was too far depreciated to 
enable me to rebuild the road, I made a contract of sale with 
G. W. Swepson in the name of R. Y. McAden and associates 
for the sale of all the stock of the road, subject to the approval 
of each stockholder, having consulted previously with the 
leading stockholders and being assured of their approval. Ac- 
cording to this contract, which was entered into about the 
first of Sept., McAden cv: Co., were to rebuild the road within 
a specified time, and have the road bed and franchises and the 
benefit of the bonds authorized to be exchanged. The stock- 
holders were to retain the surplus assets, and pay all the out- 
standing debts of the company. If the road was not finished 
in the time specified, the stockholders' rights were also to re- 
vert to them. In conformity to his contract, I gave the order 
to R. Y. McAden on the Treasurer for the bonds. Shortly 
thereafter, Mr. McAden went to Raleigh, and without any in- 
structions and without my knowledge, compromised the injunc- 
tion suit brought by Kehoe, and obtained the bonds. They 
were brought to Charlotte, and thence taken to New York as 
I was informed. In order that I might see that the proceeds 
of the bonds were applied to the purchase of rails for the con- 
struction of the road, I went to New York, when I saw for the 
first time, some of the bonds. Finding that they could not be 
sold at even 30 cents on the dollar, I advised Mr. McAden 
not to sell, to which he assented, and these bonds were at my 
request returned to the Public Treasurer, except such as wer« 



470 Document No. 11. [Session 

used in compromising the suit. It was suggested daring the 
pendency of this suit with Eehoe, that it could be compro- 
mised, which I refused to entertain, avowing my purpose at 
all times to concede nothing to those who brought the Biiit, as 
is known to others. 

Q. Nave you been engaged in any speculation in State 
bond : 

A. I have never bought or sold, or had any interest in State 
bonds except as tax payer, or stockholder in the road. 

Q. Did you have any connection in any way with the 
known as the University Railroad ease, and give the Commis- 
sion lull}' any information you may have in reference to said 
case or in reference to the argument and decision of the same i 

A. I had no connection either personally or officially with 
the case. Having been a law student, and being a friend ot 
Judge Pearson, I called to see him shortly after the first argu- 
ment was made in that ease, and had a conversation with him 
on the subject. I asked him if the constitutional questions of 
other railroad appropriations made by the Legislature would 
be discussed or comprehended in that decision. I understood 
him to say they would be. He then remarked, "I will show 
you my opinion,'' which he read to me. I asked him it that 
would be the opinion ot the court. I understood him to reply 
that it would be, and that Justice Rodman would write it. His 
argument, I considered very strong in favor of the equation of 
taxation and so expressed myself to him. I also expressed the 
opinion, that such a decision would limit the taxation of the 
State, and 1 was gratified and so expressed myself. The con- 
versation was a hurried one, the omnibus them awaiting me. 
Ele also asked me not to .-peak publicly of this conversation 

until after Tuesday when the opinion would be announced. I 
oiil\ spoke of it to Mr. Swepson. I made no communication 
by telegraph to anyone on this subject. Having this conversa- 
tion with the Chief Justice, and deferring much to his opinion, 
and believing that the decision of the court would conform to 



1871-72.] Document No. 11. 471 

his opinion, I may have had a stronger impression made upon 
my mind than the conversation authorized. 

Q. Do you know of any money, bonds, proceeds of bonds 
<»r anything of value being given, offered or loaned to any 
member of the Legislature or Convention, or to any officer of 
the State government, or to any officer of any railroad in which 
the State had an interest, to influence his action in procuring 
the passage of any bill or ordinance through tbe Legislature 
or Convention making appropriations to railroads or to other 
objects, or to influence his official action in anyway whatever ? 

A. I have no knowledge of any such transactions ; I have 
no information except from general rumors. I do not remem- 
ber that I was in Paleigh during the session of the Legislature 
of 186S-'69. I certainly made no proposition to any member 
of the Legislature or to any officer of tbe State government in 
connection with railroad appropriations or for the passage of 
any bill, nor did I ever employ or authorize any one to pay 
any member or officer to procure the passage of any bill. 

WM. JOHNSTON. 

Sworn to and subscribed before the Commission. 



December 5, 1871. 

Mr. K. P. Battle came again before the Commission and 
testified : 

1st Q. Were you one of the attorneys employed to argue the 
University Railroad case, or were you employed by Mr. Por- 
ter, of New York, in any way in connection with that suit ? 
Or did you communicate with him by telegraph or otherwise, 
in reference to the decision of the court in that suit? If so, 
state all you know about these matters. 

2d Q. Do you know, or have you any information, of any 
bonds, money or anything of value having been used or prom- 



472 Document No. 11. [Session 

iscd by any one to procure a decision of the Supreme Court 
in declaring the validity of the special tax bonds? 

3d Q. State (o the Commission what compensation, if any. 
you received for sending the telegram to New York, or for 
other services in connection with that case? 

A. In answer to the first question. I was not one of the 
attorneys employed to argue the case. I had heen acquainted 
with Mr. Porter for several years, and while Treasurer of the 
State, and he frequently consulted me on matters of State 
finance. Having heard on the street from Mr. Johnson, and 
not in confidence, but in a way I thought reliable, the grounds 
on which the Chief Justice decided against the constitutionality 
of the special tax bonds, I telegraphed to Mr. Porter rhe re- 
sult of my interview with Mr. Johnson. I telegraphed in the 
ordinary way and not in cypher. Before the re-argument, I 
left Raleigh, and was not present at that time, and had no con- 
nection whatever, with the case. Mr. Porter had requested me 
to send him the earliest information I received in regard to the 
decision, and T felt almost certain that the opinion of the Chief 
Justice would be that of the court. 

In answer to the second question. I know nothing of thy 
kind, and have no such information. 

In reply to the third question For the service above men- 
tioned and for other matters in which I had rendered Mr. 
Porter services, he paid me two hundred and fifty dollars, which 
was paid in cash. This was all I ever received from him, and 
this sum was received some time after the telegram was sent, 
and I have no farther claim against him for this or any other 
service. 

KEMP P. BATTLE. 

Sworn to and subscribed before the commission. 



1871-72.] Document No. 11 478 



LETTER FROM T. II. PORTER TO R. H. COWAN. 

New York, May .".1st, 1870. 

Col. R. II. Cowan : 

Dear Sir : In conpliance with your request, I will state in 
as few words as possible the facts relating to the cost of estab- 
lishing the validity of the bonds appropriated to the Wil- 
mington, Charlotte and Rutherford Railroad Company as con- 
nected with the University Railroad case. 

Yon are entirely familiar with what occurred in New 
York up to the time when Judge Person left to make a 
petition to the court to re-open the University Railroad case, 
which had been argued and decided, though the decision had 
not been officially announced. When Judge Person reached 
Raleigh, he found that the other attorneys engaged in the 
case had withdrawn, and that there was great dissatisfaction 
in consequence of non-compliance with certain agreements 
made, and that it was absolutely indispensable that some one 
should at once be present in Raleigh with him who should be 
authorized to represent the various railroad interests, and in 
whom implicit confidence could be placed ; otherwise the 
whole effort would fail, and the decision, which was understood 
to be unfavorable to the entire issue of bonds. In- inevitably 
made. 

Upon receiving telegrams to this effect, an I at Ihe urgent 
request of other railroad interests, I immediately started for 
Raleigh. Upon my arrival, Judge Person met me and laid 
before me the full situation, the substance of which was that 
while there was little or no doubt as to what the present, 
decision of the court was, he had reason to hope that such con- 
siderations could be presented on a new argument as would 
lead to a postponement of the decision or a modification of it. 
or, possibly, an entire reversal of it ; at all events, that the 
effort should be made ; but that to this end he considered it of 



474 Document No. 11. [Session 

vital importance that Fowleand Haywood should be engaged 
in the case with him, assigning cogent reasons for his opinion. 
I fully concurred with Judge Person, and an interview was al 
once had with Messrs. Fowle and Haywood. 

Prior to this, however, I told Judge Person that in every- 
thing relating to this matter, so far as concerned the W., C. 
A: R. R. II., I must be governed solely by his advice — that h< 
was the counsel of the company and was there to represent 
their interests, and that I must put myself in his hands and 
he must take the responsibility of directing me according as 
he thought the interests of the company should require. 

An interview was had with the gentlemen above named, 
when the question was soon introduced as to the terms upon 
which they were to be engaged. I told them that could be 
left until the matter was concluded, and that I would see to it 
that they should receive satisfactory compensation. But they 
preferred an arrangement in advance, and named to me the 
terms upon which they would undertake it. These seemed to 
me so extraordinary, that I at once most positively objected. 
They then held another conference among themselves, the result 
of which was communicated to me on the following morning by 
Judge Person. It was, that they had decided to modify the 
terms to one half what had been determined on at first, and to 
make these terms, (except what had been agreed upon and paid 
as retainers, and for services already rendered.) contingent 
upontht result of the case. These conditions still seemed to 
mo extravagantly high, and I frankly told all the gentlemen so. 
They replied, that they were not extravagant— that it was such 
a c isi . did not occur twice in a life time — that it was only a 
very .-mall per centage upon the immense interests involved. 
:,nd that finally it was contingent upon success. If they were 
not Buccessful, it would cost the companies nothing. If they 
were Buccessful, the companies could afford to pay many times 
more than as much as they demanded. I then had a private 
conversation with Judge Person, in which he strongly repre- 
sented to me that it would lie to the interest of the road to 



1871-72.] Document No. 11 475 

accede to the terms, and said that the proportion of the W. 
0. & II. Railroad was just one-third the entire amount, or in 
other words, just what would he coming to him, and that in 
case of any disapproval, which he did not apprehend, he would 
return his bonds to the Company. 1 then assented to the 
arrangement, and Judge Person reduced the agreement to 
writing. When he brought it to me, and I arose from my bed 
to execute it, (for I was quite ill, and confined to my bed 
nearly the whole time I was there,) and read it over, I 
inquired of the three gentlemen who were present as to the 
authority which I had to execute such a contract, and whether 
it could involve personal liability. They stated that I undoubt- 
edly had such authority. I replied, that as to the others, there 
cculd be no doubt, but that as to the Wimington, Charlotte & 
Rutherford Railroad, I was not so clear, and I must refer this 
to Judge Person, and be governed in my action by his advice, 
as he knew exactly all the facts in the case. Judge Person 
then gave me distinctly to understand (as the other gentlemen 
will remember,) that I need have no apprehension upon that 
point ; that I was the general financial agent of the company 
and had represented its interests for years, and was now acting 
under the advice of the counsel of the company, who was also 
a member of the board of directors. T then executed the con- 
tract, which is now in my possession, and in the handwriting of 
Judge Person. It is between T. II. Porter, agent of certain 
railroad companies of the first part, and Ed. Graham Haywood, 
Daniel G. Fowle and Samuel J. Person, attorneys and coun- 
sellors of the second part. After a general statement of facts 
relative to the suit pending in the Supreme Court, in which 
certain vital interests of other railroad companies are involved, 
&c, it stipulates as follows : 

•• Now, if said cause shall be continued under an advisari 
until the next term of the Supreme Court, or it any decision 
shall lie made therein which shall not decide that the taxes, 
levied to pay the interest upon certain bonds which have been 
issued, and which arc authorized to be issued by the State to 



476 Document No. 11. [Session 

aid certain railroad companies of which the said Porter is 
agent, under and by virtue of Acts of the General Assembly of 
said State passed in the year 1868-'69, arc prohibited by the 

Constitution of North Carolina, then, and in cither of said 
events, the said party of the first part as agent aforesaid, agree 
to pay to each of the parties of the second part the sum of 
five thousand dollars; that is to Bay: in all the sum of Hi:. 
thousand dollars; and if the said cause shall be so decided, 
either immediately or finally, as to establish the validity of the 
State bonds issued and to be issued as aforesaid, then and in 
that event, the said party of the first part as agent as aforesaid., 
agrees to pay to each of the parties of the second part, not only the 
sum of five thousand dollars, but in addition thereto, the further 
sum of twenty-five thousand dollars to each <me of the parties 
of the second part in the bonds of the State, which have been 
issued by the State under the acts aforesaid, or in the bonds of 
some of them, to the railroad companies of which the said Por- 
ter is agent ; that is to say, the sum of seventy-five thousand 
dollars in the bonds aforesaid. And this agreement is to b« 
performed in its several parts as soon as. and in the order in 
which the aforesaid conditions shall be performed." 

After the case was argued, I returned to New York, to 
await the decision This was delayed for some time, and 
after if was rendered, I decided to wait till I should see yon 
again in Wilmington the following week before explaining to 
you what had been done. Hut on reaching Wilmington and 
conferring with Judge Person, it was thought best to make the 
report ot this at the same time a report should be made of the 
sale of the bonds and the final account of Sontter & Co. ren- 
dered. This was especially thought advisable, as the settle- 
ment of all indebtedness of the company up to that date, to- 
gether with the books, &c., were to be entrusted to you up to 
the next annual meeting, before which time it was supposed 
all securities would be sold and a complete statement rendered. 

Judge Person's idea— and I entirely concurred with him— 
was, that an account of this could be better rendered with all 



1871-72.] Document No. 11. 477 

the other accounts, rather than to explain it during the excite- 
ment ol the Wilmington meeting, and more especially, as cer- 
tain explanations might gain publicity, and give rise to such 
reports and exaggerations as would interfere with the sale of 
the bonds. 

These are the reasons why you were not informed of these 
transactions until alter the bonds were sold, say about the mid- 
dle of September, lam now convinced that the course was 
not wise, but it was wisely intended and determined upon only 
in the interest of the road. 

Judge Person wished me to make the payment of money and 
bonds due him under the contract while I was in "Wilmington. 
I declined to do so, preferring to wait till all should be explain- 
ed and approved, but soon after my return to Xew York, Judge 
Fowle called upon me showing me a power of attorney from 
Judge Peason, authorizing him (Judge Fowle) to receive the 
money and bonds, and give receipts for the same. After re- 
ceiving the approval ot the other parties for whom I acted, and 
at the urgent solicitation of Judge Fowle, I paid over the money 
and bonds to Judge Fowle, the latter given me the proper re- 
ceipts in behalf ot Judge Peason, and leaving with me the !at- 
ter's power of attorney. This power, and the receipts under it, 
I now hold. These are the simple facts stated in the fewest 
words possible. Of course there are many other facts and con- 
side.iations bearing upon the question which I do not pretend 
to detail, but which would materially strengthen the foregoing 
statement. In relation to it 1 only submit one or two words 
more. 

1st. The amount paid, I considered altogether too much, and 
1 most determinedly protested against it, using in conversation 
with Judge Person a.- strong language as could employ. But 
the reduction ot the amount to what was finally agreed upon, 
and the making of this contingent upon success, was the best, 
and all, 1 could do. And the alternative was to accept this or 
abandon the whole effort. Under these circumstances. I thought 
I did right to accept it, and I think so now. 



17^ Doci mfm N<>. 1 1. 8( Bsion 

2nd. In the whole matter, 1 act 1 with reference to what 1 
considered the interests of the com] any, and according to my 
best judgement. Not only so, 1 acted conscientiously, and ac- 
cordingto what I thought to be right in the strictest, and most 
religious sense of the word. Never in my whole life, have I 
been connected with any transaction which caused mean equal 
amount of anxiety and solicitude, and never did I ever do a thing 
under a more thorough conviction of duty. These tacts, I am 
sure you will appreciate, and when you consider them in con- 
nection with the great advantages which accrued to the com- 
pany by reason ot my action. I am sure you cannot tail to ap- 
prove it. 

Yours very respectful I v. 

T. II. PORTER. 



lS71-'72.] Document No. 11. 478 



IN THE MATTER OF THE DECISION OF THE 
SUPREME COURT IN THE UNIVERSITY RAIL- 
ROAD CASE. 

Raleigh, October 3, 1871. 

Hon. E. (r. Reade, appeared, was sworn and testified : 
Q. Please state to the commission all the facts and circum- 
stances attending the decision of the case known as the Uni- 
versity Railroad case by the Supreme Court ? Was any influence 
used to procure or affect the decision as rendered ( If so, what 
and by whom ? 

A. I remember no peculiar circumstances attending the 
decision of the case. It was called and argued in the usual 
way, and was after argument, considered by the court. I have 
no recollection that the court, or any member of it, changed 
its opinion after once made up. and I do not think such was 
the fact. Yet it might have done so, without leaving any im- 
pression on my mind of any impropriety. It is not very com- 
mon, and yet not very unusal for the court to do so, and proba- 
bly in a majority of the cases ; some member or members 
■of the Court changes his, or their opinions. It is rather 
unusual for all the members to concur in opinion at first. 
It is by argument, consultation and consideration that 
they are brought together. And while a case is under 
consideration, it is usual for members of the court to 
advance views, which they do not hold, in order that they 
may be considered, and the truth arrived at. We attach no 
importance to the opinion thrown out by any member, until 
the case is finally decided. And even then, upon further con- 
sideration, the decision is reversed. Some times it leaks out 
what the decision is likely to be. We are usually reserved in 
expressing opinions to outsiders, yet we sometimes talk to gen- 
tlemen of the bar about the points in a case, and sometimes we 
intimate what we understand will be the decision before an 



4S0 Document No. LI. [Session 

..piiiioii is filed, when we suppose no mischief will result 
from it : but still every gentleman oi the bar knows that the 
final decision may lie different. And it is not at all unusual 
for gentlemen, and especially members of the bar, in general 
conversation to " fish for," and sometimes obtain the views of 
judges, and relying npon them, are sometimes deceived. I 
have made this explanation to show how many ways there are 
for impressions to go out as to what will be the final decison 
in any given case, and how foreign it is from any impropriety 
for the court or any member to change an opinion. J Jut I 
repeat, that I do not remember that there was any change ot 
the opinion of the court in the University Railroad case. My 
own opinion upon the main point, I know, was the same all the 
time as to the power of the Legislature to build the road, and 
i have no recollection that my opinion changed v.] ion any of 
the collateral matter discussed. My opinion was adverse 
to the decision of the court upon the main point. And my 
opinion is substantially the same as my opinion in the 
Chatham Railroad, decided some term or two before. To 
cover the whole ground, I know of nothing wrong in the court 
or any member ot the court, in regard to the ease, except that 
I thought the decision itself wrong. 

In regard to the inquiry if I knew of any influence brought 
to bear upon the court, or any member thereof, to procure or 
affect the decision, I state that I have no such knowledge. 
information or belief. And to cover the whole ground, I state 
that if during the whole six years I have been upon the Su- 
preme ('"'til bench, if any single one of the decisions, or of 
the proceedings of the present or preceding court, has 1" 
influenced by any consideration thai misrliJ not have in- 
fluenced the purest judge that ever sat upon tip' bench, it hat 

■ come to my knowledge. Being before t-h ('• mmittee, I 
hope ii may not be considered improper lor me to add, that 
since the war I do not remember ever to have seen a State 

cl, have never received one as a gift or loan, purchased or 
--old one. Nor have i ,-\ , \- y, ,-. ■•; ved o r been offered or prom- 



1871-72.] Document No. 11. 481 

ised a dollar or oilier thing- in consideration of official services, 
except ray salary. Nor has ever any one in any way ap- 
proached me with improper overtures, and I had supposed 
that there was not a man in the world who would do so. 

The Committee are pleased to inform me that my name has 
not been mentioned before them, nor has there been any inti- 
mation except of the general character indicated. 

If there should be anything in their further investigation, 
I respectfully reqnestthe Committee to probe it to the bottom 
and call upon me at any time for my explanation or defence. 

It had escaped my recollection, until called to my attention 
by Mr. Batchelor, that after the case had been argued, a 
second argument was asked for by counsel, and was allowed 
by the court. I do not remember whether there was a change 
of opinion of any member of the court by the second argument. 

Q. Have you heard any charge worthy of consideration 
that such influence was used ? 

A. Until I received a letter from the Committee last week, 
calling my attention to these matters, I have no recollection 
of hearing that there had been any rumor even of corruption of 
any member of the court in regard to the case. If I did, it 
must have been of such character as to make no impression 
upon me. 

E. G. BEADE. 



November 7th, 1871. 

Hon. W. 1>. Rodman appeared, was sworn and testified. 

Q. State the facts connected with the decision of the Su- 
preme Court in the University Railroad case: whether the 
same was re-argued after a decision by the court, and under 
what circumstances : will you also state to the Committee, 
whether you received any bonds oi the State of North Carolina 
from G. W. Swepson, in the summer or fall of 1869; what 

31 



1-82 Document No. 11. [Session 

une o^ said bonds, and under what circumstances they were 
received, and any other information yon may have connected 
with the subject of investigation before this Commission? 

A. I do not recollect anything attending the decision of the 
case of the University Railroad distinguishing it from that of 
other cases of importance. After the first argument, the ques- 
tions were discussed by the Justices among themselves. At 
such first discussions it is understood among us that first im- 
pressions only are presented, and not determined opinions. 
Views are thrown out for argument and consideration. From 
the importance of the case, we readily allowed a second argu- 
ment at the request of counsel. But, although no one of the 
Justices had, as far as I recollect, previously to the second ar- 
gument expressed any decided opinion, T had inferred from 
the course of our discussion what the opinion of each Justice 

. Upon the consultation after the second argument, at which 
onr final opinions were expressed, there was no change from 
the views which had been intimated on our first consultation, 
I believe that our opinions stood from the first as they were 
published in the reports. I can say certainly, that my opinion 
was not changed after I first gave the case a mature considera- 
tion. 1 was opposed to tin- legislative policy of increasing the 
State debt, and was anxious to find some reasonable ground for 
declaring the special tax bonds unconstitutional. I could not 
find any ground which satisfied my judgment. From the first, 
the opinions of the Justices as well as I could infer them, were 
substantially what our published opinions show. At no time, 
.luring the consideration oi that case, or before, or after, wa6 
any offer made to me, calculated or intended to affect or in- 
fluence any opinion or vote of mine as a Justice of the Supreme 
Court. 1 have never been promised, or received, or expected, 
anything whatever, by reason of Buch opinion or vote. I be- 
lieve that every one of my associates can truthfully say the 
same thing. I do not recollect positively whether or not, in 
the case referred to, L ever expressed my individual opinions 
on the question! involved, before the filing of our opinions. 1 



1871-72.] Document No. 11. 488 

think I probably did so pretty freely to members of the bar, 
and perhaps to others. I often do so because, I wish to hear 
what can be said against my views. If I did so in this case, it 
was always in accordance with my official opinion ; although I 
probably denounced the Legislature at the same time for their 
extravagance. I do not believe there was ever any ground for 
the rumor that the court would decide the special tax bonds 
unconstitutional, except the individual opinion of C. J.Pearson 
to that effect, which I suppose became known. 

In reference to the visit of Mr. Porter to this city in June or 
July, 18G9. I was then boarding at the Yarborough House, 
w T here he stopped. I had been acquainted with him and Mr. 
Soutter before that time, and was on friendly terms with them. 
I conversed with him many times during his stay. I do not 
recollect particularly that the case of the University Pailroad 
was mentioned at any time, but I have no doubt but that the 
question ot the constitutionality of the special tax bonds was 
sometimes mentioned in our conversations. It was then the 
general subject of conversation. I think it probable that I 
expressed to him my opinion in favor of those bonds. Proba- 
bly I also told him that I thought the majority of the court 
would be of that opinion, although that was only my opinion, 
and I was not certain of the fact Mr. Porter never attempted 
to influence my opinion by any gift, promise or offer of any 
sort whatever. I have no reason to suspect that he did so to 
any member of the court. I do not know that lie knew any 
other member of the court. 

About the middle ot August, 1869, I went to New York, 
and stopped at the St. Nicholas Hotel, as I had been in the 
habit o*" doing before the war. "When I left home, I had not 
the slightest idea of buying North Carolina bonds. At the St. 
Nicholas I met several North Carolinians, who expressed the 
opinion that our bonds would rise, and that something could 
be made by buying them and selling after the rise. While I 
was considering the matter, I met Mr. Swepson, who without 
any request from me, or from any body authorized by me t 



484 Document No. 11. [Session 

offered rae hi9 guarantee to Soutter & Co., tor the margin on 

$100,000 of our bonds for ten days. I accepted it and handed 
it to Soutter & Co., who bought the bonds. They held them 
until alter the ten days had expired, whereby Mr. Swepson'e 
guaranty became void. Afterwards they sold them on my 
account at a loss, which they charged tome. 1 have not yet 
had any final settlement with them. 1 do not believe that 
either Mr. Swepson or General Littlelield evci paid, or were 
liable, or were called on to pay a dollar for rae. After Sw | 
son's guaranty expired, Soutter & Co., relied on me only. 1 
never had any pecuniary taansaction with Swepson or Littlelield, 
except as above. If any further information is desired I will 
give it cheerfullv. 

To the above, I wish to add this : It has been said that in 
the case ot the University Railroad, there was no necessity for 
the court to have declared its opinion on the constitutionality 
of the special tax bonds, and that it might have decided that 
case without any such declaration of opinion, in reference to 
that, 1 can only say, that the whole subject of the legislative 
power of taxation was almost necessarily brought into discus- 
sion, and the court was urgently requested by counsel on both 
sides, to express its opinion on the whole subject. We thought 
that if we did not do it then, other cases would be brought 
which would compel us to do it, and that the public interest 
required an expression of our opinions on thesubject generally. 

WILL. B. RODMAN. 

Sworn to and subscribed belore the Commission. 



No\ bmbeb 9th, 1871. 

Hon. R. P. DlOK appeared, was sworn and testilied : 
Q. State all the facta as far as you remember them, connected 
with the decision of the Supreme Court in the University 
Railroad case, and whether said case was re-argued after a do- 



1871-72.] Document No. 11. 4-85 

cision by the court ? If so, under what circumstances, and give 
all the information you may have in reierence to the argu- 
ments and decision in said case. 

A. My recollection as to the arguments, consideration and 
decision of the case referred to, is very indistinct, but I will 
give my best impressions. 

I think that the court, at the first conference, agreed that the 
act incorporating the University Kailroad Company was un- 
constitutional, which substantially decided the case. There 
were some collateral questions upon which the Justices were 
divided in opinion. The Chief Justice usually draws the 
opinion of the court upon constitutional questions, and I think 
he proposed an opinion in this case, which was not satisfactory 
to some of the Justices. We had several conferences, and at 
last each Justice concluded to write an opinion, giving his views 
upon the questions immediately involved. 

As to my views, I refer to the opinion, which I delivered in 
the case. 

My impression is (but not very distinct) that after the argu- 
ment and several conferences upon the case, some counsel in 
the cause stated that Judge Samuel J. Person was of counsel 
in the cause and was then absent at the North ; and was desir- 
ous of making an argument, and the Court as a matter of 
courtesy to counsel assigned another day for argument. I re- 
member that such a favor was shown Judge Person, either in 
this case or in the case of Galloway vs. Jenkins. 

I do not remember that any one of the Justices changed his 
opinion upon the collateral questions, upon which there was 
some diversity. "We had agreed upon the main question 
directly involved in the cause, but we had not agreed upon any 
written opinion when the second argument was made. I state 
positively and distinctly that no influence, (except the argument 
of counsel and my Associate Justices) was brought to bear upon 
me by any person, either directly or indirectly, to influence my 
opionion in said case. I have never had any connection with 
North Carolina special tax bonds, and I do not remember that 



4 V,; Document No. 11. [Session 

I ever saw one. I have no reason to believe that any Justice 
of the Court was improperly influenced in his opinion, and I 
believe that each opinion in the case was prompted by honest 
Mild conscientious motives and a high sense of public duty. 

ROBERT P. DICK. 
Sworn to and subscribed before the Commission. 



Raleigh, Nov. 14th, 1871. 

The following questions were propounded to Hon. R. 31. 
Peakson, who having appeared before the Commission, sub- 
mitted his replies in writing, which were duly sworn to and 
subscribed before the Hon. W. M. Shipp, chairman of the 
Commission. 

Question 1. State all the facts as far as you can remember, 
connected with the decision ot the Supreme Court in the 
University Railroad case, and whether the case was re-argued 
after a decision by the court, and under what circumstances \ 
And give all the information you may have in relerence to the 
argument and decision of said case. 

Question 2. Was there any consultation between the Jus- 
tices or either of them, as to which bonds should be declared 
unconstitutional, or for any other purpose connected with the 
University Railroad case? 

Reply to first question. 

As fir as 1 am able to recall them, with the aid of a frank 
communication on the part of Attorney General Shipp, the 
facts connected with the University Railroad case, are as fol- 
low.- : 

On the first argument, -Mr. Pou made what [ considered a 
Btrong point upon the equation of taxation. In conference J 
so expressed myself. Justice Rodman Baid, "It did not strike 
him so forcibly." The others said nothing. It was suggested, 
u Let the case go off on the ground of a detect in the act of 



187W72.] Document No. 11. 487 

incorporation." This was met by the objection, " That will 
be considered an evasion of the main point — the constitu- 
tionality of the special tax bonds." 

The whole subject was frankly and fully discussed. I re- 
member saying to Justice Reade, " Do you go on your con- 
struction of the words, " until the bonds of the State are at 
par ?" He replied, " No, that is settled by the Chatham Rail- 
road case." One of the Justices (I think Settle) said, " Chief 
Justice put your opinion in writing, and we can take hold of 
it better. The different clauses of the constitution are so 
mixed up, that I can hardly say what it means." I wrote an 
opinion. (See 63 N. C. Reports.) 

Col. Johnson, who had been a law student of mine, and who 
was an intimate friend, called in haste, about to leave on the 
train. " Has the Court decided the University Railroad case ?" 
" Yes, the bonds are unconstitutional." " Does the decision 
extend to all special tax bonds?" "No; but my reasoning 
covers the whole of them. I have written out an opinion to 
see whether the other Justices can answer the reasoning." I 
read it to him, and he seemed to admit that the argument 
could not be answered. On reading the opinion to the Jus- 
tices, it did not seem to them so conclusive, although no one 
of them undertook directly to answer the argument. 

I state decidedly, the case was not re-argued after the deci- 
sion b} 7 the court. I had expressed an opinion against ail new 
debts, as a special tax could not be laid without exceeding the 
limit. 

Justice Reade had expressed a different opinion. The others, 
(lulntanie. "While the matter was in this state, one of the 
counsel, (Judge Fowle) asked me, "Have you decided the 
University Railroad case?" " Yes, but we are not agreed as 
to the extent of the opinion." He said, " If the validity of 
bonds for unfinished railroads is involved, the parties concerned 
wish to be heard." I said, " Certainly, for there is a hung jury. 
Make your motion in court." On the motion, it was agreed 
(Justice Reade differing), that as the justices had not come to 



188 Document No. 11 [Session 

a conclusion definitely in regard to the application ol the equa- 
tion of taxation, it was proper to hear all that could he said. 

Mr. Haywood made an elaborated argument, which, in my 
judgment, rather confused than cleard up the subject, and it 
must be admitted, that either from design, or from a confusion 
of ideas in the draftsman, the extent ol the meaning of the con- 
stitution is not clear. We all agreed about the case in hand. 
The equation ot taxation could net be violated by incurring a 
new debt for <t new railroad. 

My scope of reasoning extended to all bonds, whether for 
new or unfinished roads. I tailed to convince my associate.-, 
and each of them has given his own view of the subject. 1 
do not believe, nor have I any reason to believe or suspect, that 
any one of the Justices formed his opinion under improper in- 
fluences; although it is true, that in talking to Col. Johnson, 1 
confidently believed that Justices Settle, Dick and Rodman, 
would concur with me in opinion, because I did not see how 
my reasoning could be answered. 

In reply to the second question, there never was any con- 
sultation between the Justices and Gov. Ilolden or Treasurer 
Jenkins, as] to which bonds should be declared unconstitu- 
tional, or any consultation connected with the University Bail- 
road case. 

Mr. Jenkins informs me that .after the opinions in the Uni- 
versity Railroad case were filed, the Governor and lie came 
into the court room, and asked to be informed as to whether 
bonds should, under that decision, be issued for the extension 
of the railroad from Salem, west,',jas an unfinished road. To 
which I replied, " You see my opinion ; I consider all the new 
bonds void."' The other Justices said, "We can give you no 
opinion as to this matter ot an unfinished road until the 
question is directly presented." The conversation or consulta- 
tion eiiled there. It may have been that there was such a 
lonversation, but I have no recollection of it. 

R. M. PEARSON. 



1871-72.] Document No. 11. 489 

WILLIAMSTON & TARBORO' RAILROAD. 

July 27, 1871. 

Gen. W . Gr. Lewis appeared, was sworn and testified : 
Q. State all the circumstances to your knowledge connected 
with the passage of an act through the Legislature, at the 
summer session ot 1868, authorizing the issue of $300,000 of 
State bonds in aid of the Williauiston & Tarboro' Road? 

A. The Board of Directors of said road passed a resolution 
directing the President and Chief Engineer of said road to 
proceed to Raleigh and make efforts to procure the passage 
of a bill through the Legislature, extending aid to that road. 
I was at that time chief engineer of the road, and came to 
Raleigh as directed by the resolution. On arriving at. Raleigh 
I learned that several bills to aid railroads had just teen in- 
troduced into the Legislature, and I was informed and advised 
that this was the best time to introduce a bill of this kind to 
secure its passage. I was acquainted with very few members 
of the Legislature, and two-thirds or more them were opposed 
to me in politics. I was told by Dr. Hawkins that Gen. 
Littlefield, he thought, had great influence with the Legis- 
lature, and was ad\ ised by him to see Littlefield and procure 
his aid in getting the bill through that body. This was 
before Lbllefield had come ia bad odor in the Stat \ I saw 
Gen. Littlefield and retained him as the attorney for my com- 
pany to get the bill through the Lc. i i.'ature. I was to give 
him a contingent fee, no definite sum being fixed, but I prom- 
ised to pay h m the samo in proportion as w;,s paid by other 
companies for "he like sei vce. The bill was int oduc< d and 
passed, authorizing the exchange of $3 M;,000 of State bonds 
for the like number of the b n ds of the e< mpany, and with 
other con itions, as will appear by reference to the act of 
the Legisl ;ure its If. The President and Chief Engineer 
were also authorizjd by a resolution of th j Board of Directors, 



400 Document No. 11. ! Session 



i • 



to make a contract for the construction ot the whole road. 
They did so with John P. Pickrell, of New York. He 
agreed to take $150,000 of bonds authorized by the Conven- 
tion, as well as the $300,000 authorized by the Legislature, 
allowing for them sixty-six and two-thirds cents in the dollar, 
and the company was to pay to Pickrell $11,000 per mile for 
constructing the road in complete running order, with depots, 
water stations, <fcc, ready for the rolling stock. There were 
sonic outstanding accounts for attorney's fees, surveys, &c., 
which we desired to pay. These were mentioned to Pickrell 
utter the contract was completed, and he agreed to give a 
bonus of $15,000 to meet these charges. This he gave in two 
checks, one for $",000 and one tl»r $10,000. Littlefield drew 
an order or draft in favor of G. W. Swepson, on Gen. Stubbs, 
the Prtsideut of the road, for $15,000 1 think. This was 
presented, as I was inlornied, to Gen. Stubbs, and the party 
presenting it was referred to me, as having made the agree- 
ment with Littlefield. It was afterwards presented to me in 
New York by Col. Tate, for Swepson. I saw Gen. Littlefield 
and told him that I thought $10,000 was enough, which he 
agreed to take, and I paid Col. Tate $10,000 in Pickrell's 
check for that amount above mentioned. This check was 
not in any way the proceeds of the bonds issued by the State, 
as 80 understood by us, but was paid to Littlefield in consid- 
eratisn of his services as attorney for services rendered b\ 
him to the company in procuring the passage of the act. 

Q Why was the bonus of $15,000 paid by Pickrell, and 
what were the attorneys' tecs to which you allude in your pre- 



vious answer i 



A I do not know why, unless that Pickrell was satisfied that 
the price was a good one, and that he wanted to secure the con* 

I, and I think the condition was agreed upon before the 
signing of the contract, though I am not positive of this. The 
condition was not mentioned in the contract, and no reference 
Mas made to this matter. 

Q. Was the $15,000 ever accounted for to the company '. 



1871-'72.] Document No. 11. 491 

A. I endorsed the $10,000 check to Swepson. The 
$5,000 check, I endorsed to the order of Gen. Stubbs. 1 
do not know whether it is accounted for on the books of the 
company or not, but don't think it is. It was understood not 
to be a charge against the company by Pickrell. 

Q. Do you know anything of a contract made with Little- 
field and Deweese, or either or both ot them by the presidents 
of several of the railroads of the State, or any of them, by which 
Littlefield and Deweese were to receive 10 per cent, in kind ot 
the bonds, or any other sum issued by the State to such railroad 
companies as pay for their services in procurring the passage of 
the acts through the Legislature by which the bonds were 
issued ? 

A. I do not, except that I understood Dr. Hawkins to say 
to me that he had delivered to Littlefield $100,000 in bonds of 
the Chatham road. I know nothing of any contract, or agree- 
ment, except what I stated in the previous part of my exami- 
nation. My payment of $10,000 was based upon the payment 
by Dr. Hawkins of the $100,000 in bonds. 

Q. Do 3 T ou know anything, or have you heard of money, 
bonds or anything else being used by Gen. Littlefield orSwep- 
son or others to influence the action of the members of the 
Legislature, in procuring the passage of bills making appropria- 
tions to railroads l 

A. Nothing except common rumor. 

Q. Do you know anything of bonds or anything else being 
used by any person or parties to influence the action of any 
officers of the State in their official character to procure the 
passage ot any bills making appropriations of any kind for auy 
other purpose '( 

A. I do not, except from common rumor. 

Q. Do you know ot any bonds, or the proceeds thereof paid 
to any corporation in which the State has, or has had, an inter- 
est, being used by the officers, or any persons connected with 
such corporation to advance their own interests. 

A. I do not. 



492 Don.MKNT No. 11. [Session 

Q. Did Mr. J. F. Pickrell carry out the contract made with 
your company for grading, &c. '. If not, what was done with 
it! 

A. Be did not. The matters in dispute (a controversy hav- 
ing arisen,) were referred to G. W. Grice. of Portsmouth. 
Va., as referee, a copy of whose award will be sent to the Com- 
mission at any time required. 

Q. Bo you know anything of the meeting of the railroad 
presidents in the city of New York daring the summer and 
tall of 1869, for the purpose of speculating in, or selling State 
bonds? 

A. I know nothing about it, except that 1 heard General 
Stubbs say that Henry Clews & Co. had drawn on him tor 
$1,500 for his portion of some transactions to which he was 
not a party, and of which lie knew nothing. Be refused to 
pay, and never did pay the draft. The same application was 
made several times, and was always refused. 

Q. Do you know whethei or not Dr. Hawkins received 
Littlefield'e check for $60,000 for the hundred bonds, delivered 
by him to Littlefield '. 

A. I do not. lie told me nothing about it. 

Q. Who is the regular attorney for your road ? 

A. K. P. Cattle, Esq., is, and has been, the regular attor- 
ney for the company ever since I have been connected with it. 

W. Gh LEWIS. 

Sworn to and subscribed before the Commission. 



Raleigh, Oct. 3d, 1871. 

Mb. G. 1*. Pkck appeared, and testified. 

< v >. When and how long were you a member of the Lc<nsla- 
ture of North Carolina, and from what county? 

A. Through the extra session of 1868, and the session oi 
[868 ''.'. and 18G9-70, from Edgecombe. 



1871-72.] Document No. 11. 493 

Q. Do you know, or have you heard ot any money, bonds, 
proceeds of bonds, or any thing of value, having been given, 
offered or loaned to any member of the Convention or Legisla- 
ture, or to any State official, or to any officer of a railroad in 
which the State has an interest, to influence his official con- 
duct, or for any other purpose ? 

A. I know nothing oi my own knowledge; 1 understood 
that Gen. Littleiield had paid a wine bill for Mr. Rich, the 
member from Pitt. 

Q. Do you know or have you heard of any property or other 
thing being bought oi any member of the Legislature, by Lit- 
tleiield, or Deweese ? If so, state all the circumstances. 

A. I do not, except that he bought from me a certain con 
tract for railroad ties. The contract was first promised to me, 
by Gen. Lewis and Gen. Stubbs in the Fall of 1868. The con- 
tract was for all the tics on the Wilmington and Tarboro Rail- 
road, at 35 f-ents. The whole amount oi the contract was 
ior about $31,500, and the contract was agreed upon in the 
fall or winter oi 1868. The first negotiation for the sale of the 
contract was in the spring of 1869, and the first suggestion of 
its transfer came from Gen. Lewis. He suggested to me in 
Tarboro, that I might sell it to Gen. Littleiield, and when 1 
came to Raleigh, I spoke to him about it. After some nego- 
tiation, Littleiield agreed to give me $4,500 for the contract, 
and give me two notes in payment, one ior $1,000, at 30 days 
the other for $3,500 a 4 : 90 days i think, both of which were 
placed by me in bank for collection. When the first note 
failed to be paid upon maturity, I came up to Raleigh, and saw 
Deweese at the Yarborough Bouse, and asked him it he could 
collect the notes for me. He said he thought he might get 
them out of Swepson, and wished to know what I would take 
for them, I told him I would take 50 cents on the dollar if I 
could get no more. lie offered to collect without charge. 
After the conversation, I withdrew the notes from the bank, 
and turned them over to Deweese, taking his receipt for them. 
In about two or three weeks, Deweese notified me that he had 



494 Document No. 11. Bessioa 

placed in the bank one thousand dollars to ray credit, the hank 
also giving me the same notice. As to the balance I know 
nothing A year ago hist September, I saw Dewccse in 
Washington citv, and lie there and then showed me a note or 
draft by Swepson, for >:_10,000 or thereahoiit on sume house in 
New York, which, I think, was protested. Deweesc asserted 
that my note for S3, 500 was included in this draft, and when 
it was paid, he would pay me. This is the last I have heard 
of it, and I have received no money on it. The contract was 
not in writing, hut was an understanding with Genl's. Lewis 
and Stnbbs, which Littleiield apparently knew of. 1 made no 
written transfer to Littleiield, hut when I returned to Tarhoro' 
I informed Gen. Lewis of it, and it seemed satisfactory to him 
as well as to Littleiield. I do not know how many ties were 
got, hut I know that :*> or i> miles of the road was laid down, 
and I think all the ties for the whole road and in the posses 
sion of (Jen. Lewis. I do not know the price paid fur them 
nor by whom they were furnished. 

Q. Do yon know, or have yon heard, of any arrangement 
between railroad officers or others, and Littlefield and Deweese, 
<>r either of them, or any other party, by which money, bonds, 

other thing of value, was to be given anyone to procure the 
passage of any ordinance or hill, particularly as relating to rail- 
road appropriations, through the Legislature or Convention ? 

A. 1 <io not know of any arrangement, and the onlv case I 
ever heard was information from Gen. Lewis in L869, that his 
mad had paid to Swepson, I think, for procuring the appro- 
priation to the Williamston and Tarboro' Railroad, $10,000. 

Q. Was there an actnal contract between you and General 
Lewis, or only a promise that yon should have the contract at 
that price 1 

A. There was no written agreement, hut I understood it to 
he closed, and I think lie did also. The one thousand dollars 
above mentioned, and the balance of the notes was all the 
money 1 have ever received or expected to receive from any 



1871-72.] Document No. 11. 495 

transaction in connection with Gen. Littlefield, and is the only 
money transaction I ever had with him. 

Q. Did you, as a member of the Legislature, generally voto 
for bills making appropriations to railroads by the State ? 

A. Yes, I voted for most of them. 

GEO. P. PECK. 



November 10, 1871. 

Gen. W. G. Lewis again appeared, was sworn and testified : 
Q. Was there any contract made with G. P. Peck for fur- 
nishing cross ties for the Williamston & Tarboro' Piailroad ? 
If so, state where and under what circumstances it was made, 
whether transferred, and to whom ; was it complied with and 
the ties furnished, and by whom '( State fully all the facts 
connected with the making ; nd transfer of the contract. 

A. Soon after the act loaning the "Williamston & Tarboro' 
Railroad three hundred special tax bonds was passed by the 
Legislature of North Carolina, a contract was made with John 
F. Pickrell, of New York, to build the Williamston & Tar- 
boro' Railroad complete, furnishing everything and turning 
over the road to the company in good running order, ready 
for the rolling stock. This contract was made, I think, in the 
early part of November, 1S68. Not long after the contract 
was made, and preparations were being made to commence 
work, Mr. G. P. Peck asked me to give him a contract for 
cross ties, stating that he had a plantation near Tarboro', 
plenty of teams and provisions, and could hire more hands 
than probably anyjnan iti the county, and proposed to take a 
contract for all needed on the road, about 86,000. I replied 
that the contract had already been made with Pickrell to 
furnish every thing and build the road complete, but that Mr. 
Pickrell had requested me 1o aid him him in miking sub-con- 
tracts for ties tfcc, as he was a stranger to our people, and that. 



40 ,; Pocitmknt No. 11. [Session 

I had no doubt I could arrange the contract lor him, aa I knew 
the statement he had made us to his ability to carry out the 
contra true. At the tame time J told him that Mr. Pi 

rell limited the price to 35 cents per tie, and that I did 

not thi was much money in it, but nevertheless if he 

wished it. the contract should he made. Sometime alter this, 
Mr. Peck asked me how much I thought he could make on 
the contract '. I replied, that by very strict attention to the 
bus! night clear 5 rents per tie, but not more, and that 

it would hardly pay him for the time, risk and expense. Still 
later than this, Mr. Peck told me that Littlefield had offered 
him, I understood him to say, forty-four hundred dollars, which 
was about 5 cents per tie tor 8C,00»i ties, and asked mc 
whether he would advise him take it. I replied, that a cer- 
tainty, without risk, time and trouble, was better than an un- 
certainty. The work progressed and the ties were furnished 
by the "Wilmington, Weld on Railroad, to the contractor for 
fifty cents each. I refer to the ties now laid on the road Other 
parties furnished about 30,000 on such agreements as the one 
I proposed to Mr. Peck tor 35 cents per tie. I made the verbal 
agreement with these people for Mr. Pickrell. He paid them 
for most ol the ties they got under this agreement with me. 
Not a word has ever passed between Littlefield and me in 
regard to the transaction with Peck. I considered that Peck 
had declined to get the ties, and as Littlefield had not notified 
me ot his purchase, I made other arrangements to get the tics. 
P( k told me not long ago that he did sell his contract, to Lit- 
tlefield, and that LittleOeld had paid him the money. I looked 
upon the contract as optional with Peck. He could take it, or 
not, as he chose. No binding contract was made with him by 
me for the ties, though he might have so understood it. I 
know nothing more of the transfer ot the contract from Peek- 
to Littlefield. 

W. (;. LEWIS. 
Sworn to and subscribed before the Commission. 



JS71-72.] Document No. 11. 497 

Raleigh, Nov. 28th, 1871. 

Hon. W. M. Shipp, Chairman : 

Sir : — In reply to your question us to the disposition made 
by the WilKamston & Tarboro' Railroad Company ot the 
■51.50,000, bonds issued to that company under an ordinance of 
the Convention of 1SGS, I beg leave to state as follows : 

Under the contract between the company and John F. Pick- 
rell of November 3d, 1868, the latter agreed to allow 66f cts. 
on the dollar on these bonds, as well as on the $300,000 issued 
under act of Assembly. But the attack on the constitutionality 
of the $2,000,000 issued to the Chatham Railroad Company, 
delayed the delivery of the bonds so long, that Gen. J. R. 
Stubbs, the President assented to the demand of Mr. Pickrell 
that the bonds should be taken at their market value. 

The $300,000 act of Assembly bonds were deliverable with- 
out conditions other than the mortgage of the road, and de- 
livery to the State of the bonds of the company of like amount. 
In addition to this to procure the $150,000 Convention bonds 
the president was required to certify that the grading of the 
road was finished. These requisites were complied with. 

It appeared in evidence before the referee, Geo. TV". Grice, 
who was selected to arbitrate the disputes between the com- 
pany and Mr. Pickrell, that General Stubbs borrowed of Mr. 
i\ as banker $20,000, pledging the $150,000 Convention bonds 
as collaterals, with the argreement that they should not be sold 
without Gen. Stubbs* 1 concurrence. Mr. Pickrell stated on 
the trial that L. P. Payne & Co. were the real lenders. 

Among other things, the referee awarded that on payment 
of the loan of $20,000 and interest, the $150,000 should be 
returned to the company. This the company has not yet been 
able to do. 1 do not know whether L. P. Payne & Co. now 
have control of them or not. Very respectfully yours, 

KEMP L\ BATTLE. 

I hand you the award of Geo. TV. Grice, which gives a full his 
tory of the transactions betweenthe company and Mr. Pickrell. 

32 



4 ;,, > Do umbkt No. 11. [Session 

GENERAL CHARGES OF OFFICIAL VENALITY AND 

CORRUPTION. 

Raleigh, May 2, 1871. 

W. II. Uariuson being sworn, testified : 

Q. What was your occupation during the year 1869-70 * 

A. I was corresponding clerk in the Raleigh National 
Bank in 1869 and up to July, 1870. 

Q. Do you, or do you not, know anything about the sign- 
ing and issuing the bonds of the State, known as special tax 
bonds, during the year 1869? 

A. Some time in the last ot 1S(38 or early in 1869, during 
the session of the Legislature of 186S-'69, I saw certain 
parties, to wit, Governor Eolden, Treasurer oenkins and G. 
W. Swepson, and perhaps Littlefield, in a room up stairs in 
the Raleign National Bank, which was a private room set 
aside for the use of Swepson and his friends. I saw them 
certainly on two different occasions, and on one occasion saw 
Governor Ilolden in the act of writing, as if in the act of 
signing bonds. There were State bonds in the room at th 
time. The same parties held frequent meetings in the Bame 
room, and in a sitting room down stairs. They generally 
met in the latter when there were no bonds to sign. I think 
the bonds alluded to were the bonds issued to the Western 
North Carolina Railroad, for the reason that a great number 
of these bonds were being carried back and forth from the 
Treasurer's office to the bank. These meetings generally 
took place after banking hours, the bank closing at 3 P. M., 
the parties going into these met tings by a back or private 
way. 

Q. Haw you any information in regard to the disposition 
of any State bonds to any officer of the Mite or member of th« 
Legislature '.' 

A. 1 have no certain it formation, but I know tin re were in 
the vaults of the bank ceitiin W. stem Railroad bonds which 



1871-78.] Document No. 11 490 

were known as Swepson's bonds. I don't know the number. 

I supposed they were Swepson's bonds, as they were managed 

bv his clerk, Rosenthal. I don't know whether he claimed 

them as private property or as President of the road. About 

the same time as above stated, I saw D. J. Pruyn in the bank 

with a large roll of bonds, which he said were worth $25,000. 

This occurred a few days before Pruyn went north, saying, to 

the best of my recollection, that he was going on to sell his 

bonds. On the 3d clay of May, 1870, 1 found Horace L. Pike, 

formerly editor of the Standard in this city, just after supper, 

itting at the desk in the banking room. Mr. Heartt, a book 

keep of the bank, was present. In conversation he remarked 

that for one hundred dollars he would give me information in 

writing which would be worth $10,000 to me. I paid no 

attention to him at this time, and he then said he would do it 

for fifty, and then for twenty-five dollars, and then for nothing. 

He then wrote the paper which I now have, and which ie 

attached to this deposition. He offered it to me, saying, now 

give me the money and you can have it. I laughed at it and 

made some jesting reply. He then took up the paper and threw 

it in the basket, which was placed by the desk to hold waste 

paper. I think lie was under the influence of liquor, being about 

half drunk. In a few minutes after, Pike left, saying that he 

was going to Gov. Ilolden to get some money, as he was going 

to Washington that night. After he left, from curiosity, I took 

the pieces of paper he had left and pasted them together, at 

the same time calling Mr. Heartt's attention, both to the act 

and to the paper, after it was put together. I then pasted the 

paper on another sheet. It reads as follows: "I hereby swear 

that I am knowing to the fact that W. W. Ilolden did, in the 

year 1S00, receive $25,000 (twenty five thousand dollars) in 

North Carolina bonds, for giving his signature to a certain act 

to he hereinafter named. " 

(Signed.) H. L. Pikk. 

W.HAL. HARRISON. 
Sworn to and subscribed before the Commission. 



500 Documhni N<>. 11. ttion 

Philip A. Wilb\ testified as follows: 

Q. I )o you, or do you not, know anything about the signing 
and issuing the bonds of the State for the Western North 
Carolina Railroad, kno\* n as special tax bonds, during the y. 

19 '. 

A. [know of Gov. Elolden's signing some oi the bonds in 
the room up stairs, spoken of by v >'. !I. Harrison. ! donH 
remember the exact date, but think in the hill of '69; f am 
sure they were bonds of the W< stern Division oi the Western 
North Carolina Railroad. I have an impression that tl 
bonds were signed in great haste, in order to get them into 
market at the earliest day, and before other bonds wi ned. 

[ know nothing of any moneys paid to any officials of the State, 
or members of the Legislature, to procure ti age of any 

bill. 

P. A. WILEY. 

Sworn to and subscribed before the commission. 



Raligh, Nov. 28th, 1871. 

Mr. Wili", appeared this day before the commission, and 
desend to make the following additional statement. 

[ have seen the evidence oi Mr. Pnlliam in which ] 
he thinks that Mr. Swepson deposited bonds for a margin in a 

culation in which \ was engaged. I desire to si ite that he 
ntircly mistaken, as Mr. Swepson never placed any bond 
a margin for me. The margin put op was in money, and not 
put up by Mr. Swepson, though he did pay the losses incurred 
in the speculation, which was purely a private one. 

P. A. WILE! 

Sworn to and subscribed before the commission. 



1871-72.] Document No. 11. 501 

Raleigh, July 25th, 1871. 

Mr. S. T. Cajreow appeared, was sworn and testified. 

Q. Were you in New York in September 1860, and do you 
remember being present at the banking house of Soutter & Co- 
on a certain occasion when tbore were a number of railroad 
presidents and other persons present ? If so state who they 
were, and what occurred, to the best of your recollection ? 

A. I was in New York in Sept. 1869. I saw at that time in 
New York, at the St Nicholas Hotel and other places, Gov. 
Holden, Treasurer Jenkins, A. J. Jones, Dr. Sloan, Dr. Mott, 
S. McD. Tate, Gen. Stubbs, Swepson and Littlefield, and a 
great many other North Carolinians. These parties seemed to 
be frequently in consultation about the State bonds, with Gov. 
Holden and Treasurer Jenkins, and with each other. The 
object seemed to be, to elevate the price of those bonds, but 
what the conversations were, or what plan they adopted, I do 
not know. I also saw many of these same persons in consul- 
tation at the banking house of Soutter & Co., but I do not 
know the result of the consultations there either. 

Q. Were you the owner of any of these State bonds, or in- 
terested in bond speculations in the year 1869, or at any time? 

A. I never owned a State bond, and was never interested in 
these speculations in any way. I will say in explanation of 
my former answer that I was not in any way connected with 
these men, that I was not in their confidence, and was never 
consulted by them. I went to New York in company with 
my wife, at the special invitation of Gov. Holden and his wife. 

Q. Do you know of any money, bonds, proceeds of bonds, 
or any thing of value given or offerred to any member of the 
Legislature, or Convention, to influence them in passing, or 
procuring the passage of, any bill, or ordinance through either 
of those bodies ? 

A. I do not, except iruni rumor. I believed it was done and 
publicly denounced it. Mr. Swepson complained on one oc- 
casion that I was bringing public opinion to bear against him 



502 Document No. 11. [Session 

about the use of the bonds. I told him if I was, I was only 
doing it in a proper way ; that the Legislature did not auth- 
orize the issue of the bonds that he might dis] .' them as 
he pleased, but that they were to be sold, and the proceeds ap- 
plied to the public works of the Statu. Swepson insisted that 
he had a right to do with them as he pleased. I know nothing 
more of the charges of bribery and corruption than what I have 
above stated. 

S. T. CAUROW. 
Sworn to and subscribed before the Commission. 



Ralbjgh, July 26th, 1871. 

John Gatlin Esq., appeared, was sworn, and testified. 

Q. Did you have any transaction with M. S. Littletield 
about May the 14th, 1869, in which you were to receive a sum 
of money I It so, state all you know about it. 

A. I was a member ot the Legislature of lSGS'-GO- I was 
introduced during the summer session of 1SG8 to Mr. Cavarly 
by a mutual friend, Capt. J. B. Hunter ot Portsmouth, who 
represented to me that Mr. and Mrs. Cavarly wished to buy 
North Carolina bonds. Owning some myself, and knowing 
parties who owned others, after some negotiation between Capt 
Hunter and Mr. and Mrs. Cavarly, it was decided that Mr. C. 
should go to Gates county, which I represented here, and en- 
deavor to buy as many bonds as he could. I gave him letters 
of introduction to my friends there. Mr. Cavarly's trip proved 
a failure, and I had no farther connection with him. During 
the winter session of 1SGS-G0, the precise time T do not recol- 
lect, 1 made a great many effort to sell those of the bonds 
which I owned, which were issued during the existence of the 
Confederacy, had " Confederate States " instead of " United 
States," upon them, and which were issued for purposes of In- 
ternal Improvement. But failing to do so, satisfactorily to 



1871-'72.] Document No. 11. 508 

myself, I endeavored in company with others who were inter- 
ested in that class of bonds to have a bill passed by the Legis- 
lature acknowledging their validity. "We failed on account of 
the shortness ot time to get the bill through. About this time, 
in conversation about these bonds, Gen. Littlefield offered to 
pay me 20 cents in the dollar for all that I owned myself and 
could get. In consequence of this offer, I bought up several, 
and others were given to me by my clients, to dispose ot them 
on the best terms possible, making in all some eight or ten 
more than I originally owned. I bought them up some time 
in April 1S69, and offered them to Gen. Littlefield according 
to contract, and for one cause or another, he delayed receiving 
hem until the session closed, when I became very importu- 
nate for at least the money expended by myself in that pur- 
chase. He did not in person receive the bonds, or make any 
payment, but, leaving on the cars, sent me a draft for $1,000 on 
G. W. Swepson payable in 30 days. I presented the draft as 
soon as I saw Mr. Swepson, who accepted it and then proposed 
to buy it at a discount. I offered to discount it at 5 per cent. 
He offered to pay it immediately at 10, which I accepted, he 
giving me a written order on the Raleigh National Bank for 
$900, and sent for Mr. Rosenthal his clerk, to get me the 
money as I intended to leave next morning on the train. It was 
between 9 and 10 o'clock at night. I went along with Mr. 
Rosenthal, and the money was paid in the presence of the vari- 
ous clerks of the Bank. I never delivered to Gen. Littlefield 
any of the bonds, he having left without receiving them, and 
never having made any demand. I left more than enough to pay 
him at the agreed price, on special deposit at the Raleigh Na- 
tional Bank where I had previously deposited them until about 
• the close of the session of 1869-'70, when I drew them out, de- 
livering those belonging to my clients, and have the remainder 
now. The sum paid me on Littlefield's draft was just about 
an indemnity for money expended by me in the purchase of 
these bonds. 



504 Doru.Mi.vi No. 11. [Session 

Q. To what corporation were these Bonds issued of which 
you have spoken ? 

A. It was the Western road, commonly called the Coal Fields 
road. 

Q. Will you state how man\ of these bonds you owned be- 
fore the contract with Littlefield, and how many you purchased, 
and at what price, if you can remember '. 

A. I owned nine myself, and purchased tour or live at about 
20 cents in the dollar. 

Q. \fii6 the contract with Littlefield in writing, and did you 
receive pay for those of your own bonds you agreed to sell him '. 

A. The contract was not in writing, and I only recieved the 
amount stated above in the whole transaction. 

Q. Did yon retain the whole amount you received, or did 
you divide it among your clients ] 

A. I retained it as an indemnity fur purchases made by my 
self. 

i v !. State as definitely as you can the time at which the bill 
you speak of above was introduced, and the time of your con- 
tract with Littlefield I 

A. I think the bill was discussed or introduced, (1 am not 
certain it was ever introduced, but certain it was drawn up. 
and think introduced,) say shortly after the meeting of the 
.islature after the return from the Christmas holidays in 
the beginning of the year 1869. The contract with Littlefield 
shortly subsequent to that time. The precise date I don't 
remember, but after I had despaired of the passage of the bill. 

(.,>. Do you not know that Littlefield was very active in pro- 
curing the passage of bills making appropriations to the various 
railroads during the sessions of 1868 '69 1 

A. I knew that he had that reputation. I have seen him ill. 
the lobby very often, and in close conversation with the mem 
bers. I think be was very active in procuring the passage of 
the.-.' bill.-. 1 know that liquors and cigars were kept in one 
of the rooms of the Capitol, and was said to belong to General 
Littlefield. 



1871-72.] Document No. 11. 505 

Q. Did you ever have any conversation with Gen. Littlefield 
in regard to the passage of these various Railroad bills, or any 
of them ? 

A. Never, except generally. He never mentioned the 
subject specially to me. 

Q. Were you not an active supporter of these Railroad 
measures during that session ? 

A. I was an active supporter to the appropriation to the 
Norfolk and Edenton Road, as it was called, and voted gener- 
ally for the appropriations to other roads, for the purpose of 
securing the passage of my own bill. 

Q. Do you know of any money, bonds, proceeds of bonds or 
anything of value, being given or offered to any member of 
the Legislature, or Convention, to influence them in passing, 
or procuring the passage of any bill or ordinance through either 
of those bodies, making appropriations to Railroads? 

A. I do not. 

Q. Have you had any interview with Swepson or any of his 
friends in reference to the payment of $900, on LittlefiekTs 
draft, since it was paid ? 

A. Col. Win. A. Moore came to me after the passage of the 
Senate resolution, appointing the committee known as the 
•'Bragg Committee," and stated to me that he had been retained 
as counsel by Mr. Swepson ; that Mr. Swepson considered 
himself in trouble, and thought that the resolution ought to be 
rescinded, and that he (Swepson) depended upon me as one of 
his friends, as there had been a little transaction between us. 
I asked Mr. Moore what transaction he referred to. lie said 
that Mr. Swepson had stated that he had paid me a check for 
$1,000, whereupon I told Mr. Moore that I Mas not one of 
Swepson's supporters ; that the manner in which he (Moore) 
approached me rendered it useless for me to attempt to explain 
the transaction to him, but if Mr. Swepson counted me as one 
of his friends he was mistaken ; whereupon Mr. Moore 
remarked that he only interferrcd as counsel for Mr. S. ; that 
he himself came into the Legislature after the appropriations 



506 Document No. 11. [Session 

were made, and had no interest whatever in the transactions. 
Mr. Moore, at this time, was a member of the House of Rep- 

entatives from Chowan. Mr. Moore, moreover, stated to 
me at that time that lie had been retained for Bome time pre- 
vious as counsel f<>r Mr. Swepson. 

JOHN GATL1NG. 

Sworn to and subscribed before the Commission. 



Raleigh, X. C, November 20, 1871. 

Messrs. Siiipp, Batiicelor and Martin : 

Gentlemen : I submit herewith copies ot two letters bearing 
upon the purchase of North Carolina bonds detailed in my 
statement made to your some time since At the time I had 
lost sight ot them, but making immediate search among my 
papers, I found them. I ask that they be appended to my state- 
ment as a part. They are as follows : 



"Raleigh, March 20, 1800. 

Mr. Catling : 

I regret to have to tell you the class of bonds I wished you 
to buy for me will not prove as valuable as I hope. " Con- 
federate States" flying at their mast head, damns them with 
the party. 

I will, however, keep my promise with you, and pay you for 
all those yon have bought. You say you have four more, 
coating between eight and nine hundred dollars. I will cer- 
tainly pay for them, but please do not buy any more. 

Four servant, 

M. S. LITTLEFIELD." 



1871-72.] Document No. 11. 507 

" Raleigh, April 1!, L869. 

Mr. GrATLING : 

I am compelled to leave by first train without seeing you. I 
enclose check on Mr. Swepson for one thousand dollars. I 
make it thirty days, lie owes me. 

Your servant, &c, 

M. S. LITTLEFIELD." 

I am convinced from facts communicated to me since I was 
before you, that the transaction was intended in its conception 
to involve me with certain persons, and that it was used to 
protect those persons with friends of mine supposed to have 
influence, although I did not know it at the time. It was gene- 
rally known among 1113' acquaintances that I was interested in 
that class of bonds, the subject ot the transaction, and I 
received, during the session of 1868-"69. numerous letters from 
persons holding bonds soliciting my advice and assistance. I 
suppose this suggested a plan by which my freedom of action 
was sought to be controlled. I do not see that ordinary pru- 
dence could at the time have foreseen that a business transac- 
tion of so usual a nature might render the actor liable to suspi. 
cion. It is fortunately in my power to prove, if neceesary, 
every circumstance attending the purchase of three of the four 
bonds — the person buying them for me — the person from whom 
bought and the price paid — a friend who bought the fourth for 
me is now dead. 

I have within the last day or two received from Judge "Wm. 
A. Moore, a letter declaring that the statement in regard to the 
conversation between us, differed from his recollection ot that 
conversation. II is letter also enclosed one from Mr. George 
W". Swepson denying that he had ever retained Mr. Moore as 
his counsel. 

In regard to the variance of statement between Judge Moore 
and myself, for fear that I may do that gentleman injustice, 
whose acquaintance and friendship dates back to my boyhood. 



Dvx i mk.\ r No. 11. Session 

I will state (despite whatever oi mortiticatioD it may cause me 
to do so,) that when for the first time It is conversation placed 
before me the danger of a business connection, the idea of con- 
cealing which had not even suggested itself to my mind, and 
which I had mentioned to more than one person, I was verv 
greatl}' startled and shocked ; and for that reason cannot 
depend so implicitly on my impressions ; yet I am compelled 
to say that if those impressions are at fault, they are entirely 
so, and I can recall no recollection other than that already 



given. 



I have the honor to he, gentlemen, 

Very respectfully, 

JOHN G ATI. INC. 

Jlon. W. A. Moore submitted the following written state- 
ment to questions propounded to him by the chairman, which 
statement was submitted to the Commission, and sworn to and 
jQribed before them. 

1st Q. Were you in New York in the summer of 1869, and 
did you then receive from George W. Swepson twenty special 
tax bonds '. If so, will you state the circumstances of the 
transaction — what became ol the bonds— and all you may 
know in reference to speculations by Swepson, Littlefield and 
others in X. C. special tax bonds in the summer or fall of 1869. 

A. In regard to the first branch of the above question, I 
have to say. that I was elected to the House of Representatives 
to fill the unexpired term of Richard Clayton. Esq., and took 
my sent on the 23d (b\y of February, 1869. All of the acta 
authorizing the issue of special tax bonds, and under which 
bonds were issued, had been passed Bovcral months before my 
election, (I think at the special Bession of 1868,) and a portion 
of the bunds were then on the market. 

On the 7th day of April, 1869, the Legislature ihcorpor 
the Kdenton & Suffolk Railroad, and appropriated for its con- 
struction eight hundred and fifty thousand dollars in Stat.; 
bonds. 



1871-72.] Document No. II. - r >09 

As my constituents were deeply interested in that road, I 
determined to go to New York and there remain until the 
American Bank Xoto Company should print the bonds. 
T arrived there early in May, and soon discovered I would 
have to remain probably two months. The printing of the 
houds would have been postponed for other work if I had 
returned home. 

Having no other business in the city, I visited the Stock 
Exchange and other places of interest. There were a great 
many North Carolinians in the city, and nearly all of them 
boarded at the St. Nicholas hotel. After I had been there 
some two or three weeks, Mr. George W. Swepson casually 
asked me how long I expected to remain. I replied, until the 
Edenton and Suffolk Railroad bonds were printed, which 
would probably detain me two months. He said if I would 
purchase some North Carolina special tax bonds I could make 
84,000 or $5,000 before returning home. He then gave me 
his reasons for thinking they would rise in the market, which 
fully satisfied me, as I had great confidence in his financial 
ability. 1 told him 1 could not purchase, as I did not have 
money enough to put up the required margin. He replied 
that it I desired it, he would lend me ten or twenty bonds. I 
hesitated at first, tor fear 1 might lo^e them, but he re-assured 
me by expressing again his firm conviction that the bonds 
would certainly rise. This seemed to be the opinion of every 
person with whom I conversed on the subject. He lent me 
twenty bonds, which I placed with a broker as a margin, with 
instructions to purchase for me North Carolina special tax 
bonds. I will hero remark, that the New York brokers 
require a deposit of ten or twenty per cent, as a margin to 
secure them from loss in the event of a decline in the price of 
stocks purchased for their customers, and if the stocks do de- 
cline they require a farther deposit, according to the circum- 
stances of the; case. 

I had little reluctance in accepting this loan, as Mr. Swepson 
was supposed to be very wealthy and would feel no inoonven- 



S10 Document N<». 11. [Session 

iencc in making the loan. II is estate was estimate)] at several 
millions of dollars. I remained longer than I originally inten- 
ded. In Attgnst I went home, intending to return to the city 
in a few weeks; Shortly after my arrival I received from Mr. 
Swepson the following letter : 

" Col. W. A. Mookk. 

Dear tiir : I regret that I did not tee yon before you left 
New York. You will please send by express the twenty bonds 
I lent you, as I am determined not to buy any more bonds and 
wish to close up my business before I return home. 

Respectfully, 

G. W. SWEPSON." 

I immediately returned to New York, got the bonds from 
my broker and tendered them to Mr. Swepson with my thanks 
tor his kindness. He replied, that he would be in the city 
some time yet, and that T could keep them ami use them until 
he called for them. I re-invested them. Very soon the bonds 
commenced to decline and continued to do so, until the gold 
panic on the 24th September, startled the commercial world : 
when all stocks went down with a crash and these bonds were 
lost in the general wreck. 

The second branch of the Committee's question is, that I 
shall state all I may know in reference to speculations by 
Swepson, Littlelield and others in North Carolina special tax 
bonds in the summer or fall of 1869 ; to which I answer, that I 
know very little of their operations. I never was in the con- 
fidence of either Swepson, Littlefield or the others. 1 was 
present at one meeting ot the bond-holders, held at the St. 
Nicholas Hotel about the 15th day of September, 1869, just 
eight or ten days bciore the gold panic. 

The object of the meeting was to devise some plan to avert 
the rapid decline of the bonds. Messrs. G. W. Swepson, M. 
S. Littlefield, C. L. Cobb, Samuel McD. Tate, Thos. W. Dewey, 
Thos. P. Branch ot the firm ot Branch and Sons in Petersburg, 



1871-72.] Document No. 11 511 

and myself and other bond-holders, whose names I have for- 
gotten were present. All seemed actuated by the single desire 
to arrest the fall of the bonds. The meeting adjourned without 
action. I was never present at any other meeting, nor do T 
know of any having been called. 

Q. Will you state whether you know or have any informa- 
tion of any agreement between the various railroad Presidents 
and Littlefield or others, by which the said Presidents were 
to pay a certain portion of the proceeds of their appropriation* 
to secure the passage of said bills ? 

A. I know nothing, nor have I any information on the 
subject. 

Q. Were any propositions made to you by any member of 
the Legislature, asking money or bonds, to secure the passage 
of the Edenton & Suffolk Railroad bill ? If so, state who it 
was, and all the facts. 

A. After the bill had passed the House and was pending 
in the Senate, Mr. Laflin, of Pitt, stated to me that if I would 
agree to pay a certain Senator seven of the bonds, that he 
{the Senator) would have the bill passed. I declined the 
proposition most emphatically, and told Mr. Laflin to eay to 
" that venal cur, that the bill might fail before I would pay 
one cent for its passage." He immediately replied, laughingly, 
that he was merely jesting. I did not ask the name of the 
Senator, for I had no idea of acceding to the proposition, nor 
do I know whether or not Mr. Laflin was in earnest. This 
was the only proposition made to me by any one. 

Q. After reading the testimony of John Gatling as to a con- 
versation with you during the session of 1869-70, state your 
recollection of that conversation ? 

A. The facts are these : I remember the conversation, but 
it was in regard to the " Committee of the whole House," and 
not the "Bragg Committee." From the beginning I was 
opposed to the first ; the other I had nothing to do with, as it 
was a Senate committee, over which the House had no control. 
If I had attempted to procure its dissolution, I would have 



512 Document No. 11. [Session 

approached Senators, who created the committee. I nev< 
mentioned the subject to a single one of them, as they would 
all i il summoned. Doubtless Mr. Gatli ' rror ar 

from that both committees were in session at the same 

time and engaged on the same subject matter. I always advo 
cated a | ' I committee, as my remarks in the Daily Stan- 
mber 1, L869, will show. 
I am reported as saying, after stating my objections to ti 
bill of Mr. Ellife, of Catawba, ''Another proposition was, that 
the House should resolve itself into a committee of the whole, 
and take charge of the investigation. I was opposed to tl 
cour . b -'such a committee was too large and unwieldy. 
The investigation would necessarily extend over several months, 
at a great expense to the State, and to the detriment o\' public 
business. T desired, and so stated, that the Governor, or the 
presiding officer of each House, or each House itself, by ballot. 
-Mould appoint a fair and impartial committee, composed of the 
best men in the Republican and Democratic parties, in whom 
the people of the whole State would have confidence. 

I was in favor of that course then, and I am in favor of it 
now. The majority, however, preferred the committee of the 
whole House and rather than have no investigation at alb 1 
voted for it." 

The committee asked M. S. Littlefield if he had used any 
money or other thing, either directly or indirectly, to influence 
any Senator or member of the I [ouse in giving his rote \^v any 
measure. Witness replied that he had not. 

II was then proposed to ask him "if he had had any money 
transactions in his individnal business with any Senator or 
member of the House." I thoughtsuch questioi Iculated 
to do great injustice, ami were without a parallel in legislati 

The excitement was Intense throughout the Sta 
question was on every man's lips, " V7ho has borrowed any 
money from Littlefield or Swepson '." 

I beard i1 rumored, thai Mr. Gatling had borrowed some 
< y from Swepson or Littlefield ; I did no1 learn which. 



1871-72.] Document No. 11. 513 

nor the particulars. I did not doubt his integrity, but I saw 
the danger to which he was exposed. 

Having been, intimate friends from childhood, I determined 
to inform him of the rumor. I did so. and urged that the 
committee should be discharged, as its continuance could do 
no good, and might do much harm. 

He was, as he states in his testimony, startled — alarmed — 
shocked — as any honorable man, however innocent, would be, 
placed in his situation. After a moment's pause he replied 1 
that he did not fear an investigation, and at the proper time 
would make an explanation, if called on. 

I then remarked, that I hoped he would not misunderstand 
me ; that I came into the Legislature after all the appropiia* 
tions were made, and could havo no personal interest what- 
ever in the matter. Here the conversation ended. I do not 
pretend to give the words — only the substance. 

Mr. Gatling was entirely mistaken in supposing that I was 
noting for Mr. Swepson. I do not think Swepson ever said 
one word to me on the subject. I know I was never his 
counsel in any matter, nor did I profess to act as such, nor 
could there have been any necessity for me to do so in this case. 

I think the rumor above alluded to, was first communicated 
to me by Joseph H. Etheridge, the Senator from Cuirituck, 
and shortly afterwards by James L. Robinson, the member 
from Macon county. I told Mr. Gatling the first time I saw 
him afterwards. I have seen Mr. Robinson to-day, and he 
recollects distinctly mentioning the rumor to me about the 
time indicated above, and I append to this statement a letter 
from Mr. Swepson, received within a few days last past. 

Doubtless Mr. Catling's natural excitement on my failing 
to express myself clearly, (for the subject was a very delicate 
one,) caused him to misapprehend me. The matter was never 
mentioned between us again, nor did I know the particulars 
of the transaction until I saw his testimony before the com- 
mittee. Very respectfully, 

W. A. MOORE. 
33 



514- Document No. 11. >sion 

COPY OF LKTTEB FEOM G. W. BWEP80N. 

Haw Rivee, Oct. 31st, 1-71. 

Hon. W. A. Mooee. 

Vi . . / Yours oi 23d inst. received &c. * * I never 
in my life employed you, or tried to employ you as my counsel 
in any transaction whatever, neither did I authorize any person 
to do so for rae. I dont think Mr. Gatling's name was ever 
mentioned between us, certainly not in connection with any 
business. 

Yours truly, 

(i. W. SWEPSON," 
Sworn to before the Committee. 

W. A. MOORE. 

Me. M. W. Churchill appeared, was sworn and testified : 
Q. Where do you reside 2 

A. In the city of Raleigh. I came here Jan. 3d, 1869. 

Q. "What was your occupation in the year 1SG9 '( 

A. I was book keeper in the office of the Standard news- 
paper. 

Q. Do you remember of receiving for M. S. Littleiield from 
< 1. AY. Swepson, about June 22d, 1869, the sum oi $500 I 

A. Yes, I remember receiving it. Jt was received from 
Swepson for the purpose of paying hand- employed on the 
Standard office, then building, and was handed over to Mr. 
Prairie the contractor. 

Q. Do you know of any arrangement between Swepson and 
Littleiield by which that matter was adjusted '. 

\. I know of none. 

<>. Do you know anything oi the agreement between Little- 
field and Swepson to procure the passage of any railroad bill* 
through the Legislature j 

A. J do not. 

<,». Do you know anything of any money, bonds or proceeds 



l?71-'72.] Document No. 11. 51* 

of bonds, or anything of value paid or ottered to any member 
of the Legislature or officer of the State to influence them in 
procuring the passage of any bills making appropriations for 
railroads, through the Legislature, or for other purposes '. 

A. I do not. 

Q. Do you know, or have you heard that Gen. Littlefiehl, 
at any time gave or lent money to any member of the Lesis- 
la t ure ? 

A. Yes; I remember of his loaning money to A. W. 
Stevens, member of the House from Craven county, to the 
amount $1,000, for which he took Stevens" note. Also, he 
lent $100 to J. AY. Stevens, Senator from Caswell county. I 
think he first gave a note tor it, and then took up the note by 
giving an order on the Treasurer on account of his j>er ddem. 
I presented the order to the Treasurer, who refused to pay it, 
saying he had already paid up Mr. Stevens in full. I think I 
have the order yet. He also lent J. T. Harriss, member of the 
House from Franklin, $75. I remember that J. II. Harris, 
member from Wake, also got a small sum, I think about one 
hundred dollars. 

M. W. CHURCHILL. . 

Sworn to and subscribed before the Commission. 



PvALEK.H, July 27. 1871. 

Mr. A. J. Rr/TJES appeared, was sworn and testified : 

Q. Where do you reside ? 

A. In this city. I came here about the month of August, 
! 368. 

Q. What has been your occupation here i 

A. Landlord and proprietor of hotels; I coping the Ex- 
change and National Hotels. 

Q. Do you remember receiving from G. W. Swenson, by 



$16 Document No. 11. [Session 

order, or otherwise, of Gen. Litllefield, on or about the 2d 
day of February, 18G9, the sum of $-150 ? 

A. I do not remember receiving that or any other sum from 
either Swepson or Littlefield. I remember no transaction 
with Gen. Littlefield in which such a sum of money was in- 
volved, in the latter part of 1868 or in the first part of 1SC9. 

Q. State all you know that you heard from Pruyn, or any 
one else concerned, about the sale of the Penitentiary prop- 
erty on Deep river, to the State '. 

A. On one occasion, when Pruyn and Col. Heck were 
leaving my house, going out to Lockville, Pruyn gave me ;i 
bundle containing about 40 State bonds to keep for him. I 
kept them several days. Pruyn stated that they were his 
profits out of the sale of the Penitentiary lands sold to the 
ft'tate, and that he had made a good thing of it. I saw Pruyn 
and Col. Heck go off several times to Deep River. They 
generally went off very quickly, and it appeared to me, with 
a good deal of privacy, as if they did not wish their destina- 
tion known. Upon reflection and examination since the 
question was first propounded, I think the charge of $450 can 
be explained as follows : In the latter part of 1868, there 
was a Republican mass meeting in Raleigh, and Gen. French 
telegraphed to J. W. Holden to obtain quarters for the Wil 
mington delegation. Mr. Holden spoke to me to take them 
at the Exchange Hotel, which I did. "When they were 
leaving, I presented them my bill, supposing it would be paid 
as usual They said they were not expecting to pay it, and 
said 1 nust call at headquarters, and referred me to Mr. C. L. 
Harm. I presented it te Mr. Harris and he declined paying- 
it, saying that there was little money in the treasury, and 
they iad no right to send the bill to him, but ought to have 
paii" it themselves. After that, as I did not get my money, 
<J.n. Littlefield promised that he would pay it, or see it paid, 
nd I afterwards received it through Judge Merrimon, whom 
1 had employed to collect it. I think it was settled in some 
way in payment of a carriage and horses, which John T. 



1871-72.] Documbnt No. 11. 511 

Deweese had sold to Mr. Harris, of Franklin, and which Mr- 
Harris had sold to me. This is all I recollect about it. 

A. J. RUTJES. 
Sworn to and subscribed before the Commission. 



Raleigh, Sept. 4th, 1871. 

W. F. Askew appeared, was sworn and testified : 

Q. Did yon ever pay J. II. Harris any money on account of 
G-. W. Swepson '( If so, how much and under what circum- 
stances ? 

A. I paid him $2,000 on a note held by Harris against 
Swepson. The note was for probably $5,000, on which some 
payments had been made. I bought it for $2,000. I bought 
it on the 14th of May, 1870. I heard that he had it for sale, 
and telegraphed Mr. Swepson, who instructed me to purchase 
it. I did so, and Mr. Swepson afterwards repaid me by an 
acceptance on R. R. Swepson & Co. Neither Harris or Swep- 
son told me the consideration of the note, and I have never 
learned it from any one. 

Q. Do you know of any other money or bonds paid by G. 
\Y. Swepson or Littleiield to any other members of the Legis- 
lature, to influence them for any purpose ? 

A. I do not. 

Q. Do you know any fact connected with the North Carolina 
State bonds, in addition to what you stated before the Bragg 
Committee ? 

A. I do not, except that it was my understanding from Mr. 
McAdon, that the bonds, when bought, were to be returned to 
the State Treasury, and he requested me to buy the bonds of 
Messrs. Badger and Fowle for the same purpose. 

Q. "Whose agent were you in effecting a compromise in tbfi 
Kehoe suit, and how did you become such agent ? 

A. I cannot say that I was the agent cf any particular party. 



•*19 Document No. 11. [Session 

Mr. Swepson and Mr. McAden told me to find out v 
brought the suit. They did no! say why, but Mr. McAden 
said he thoughHt was a blackmailing suit, and intended to 
tight them. i then saw Deweese, and had the conversation 
with him, which is given in the report of the Bragg Commit- 
tee. I then called on Col. Eaywood, at his office, and had r 
conversation with him, in which lie stated that if I would write 
to Mr. McAden to settle the matter, he would make it mv in- 
terest to do so. I did write to McAden, and the other matters 
took place as stated in the Bragg report. I know nothing of 
the bonds received by T. F. Lee, or any other parties, except 
aS stated before the Bragg Committee. 

W. F. ASKEW. 
Sworn to and subscribed before the Commission. 



Raleigh, Sept. 6, 18t>9. 

Mr. It. W. Hamlet, appeared, was sworn and testified : 

Q. Where did you reside in the early part of the year 1869, 
And what business were you engaged in ? 

A. I reside in Graham, Alamance county, but owned and 
carried on a bar in the city of Raleigh. 

Q. State whether any bar bill was paid by (icn. Littlefield 
to you for any member of the Legislature of 1868-69 ! 

A. In April, 1869, James Sinclair, a member of the Legis- 
lature from Robes* .i c >unty,gave me a draft for si::;., (which 
he owed me for a bar bill,) on Gen. Littlefield. I transferred 
the draft to Mr. Blair tor money which I owed him. 

Q. Did you or not, about the same time, have a conversa- 
tion with Mr. Sinclair as to compensation to be received by 
him tor his inflnence in the Legislature i If .:<; the sub- 

stance thereof ? 

A. Some time before the adjournment ol the Legislaturej I 
mentioned Mr. Sinclair's bill to him and requested payment. 



1871-72.] Document No. 11. *19 

He said lie was irood for it. and that I need not be uneasv ; 
that they owed him $5,000 for his influence in the Legislature 
besides hiaper diem. He said in several conversations that 
lie was making money and liked to enjoy it. He did not use 
the name of any one individual when he said they owed him 
$5,000. 

Q. Do you know ot any money or bonds, or anything of 
value, paid by any member ot the Legislature, or any member 
<jf the Convention to influence their action in procuring the 
passage of any bill or ordinance through either of these bodies 'I 

A. I do not, except what I have above stated. 

K. W. HAMLET. 

Sworn to and subscribed betore the Commission. 



September 6th, 1871. 

J. A. Hyman appeared, was sworn and testified : 

Q. Were you a member of the Legislature of 1868-69, and 
were you one of the committee to select and purchase a site 
for the Penitentiary ? 

A. I was. 

Q. Did you concur in the location of the Penitentiary at 
Lockville, and the purchase of the lands in connection there- 
with ? If so, will you give your reasons for the same ? 

A. I did concur in the location at Lockville, principally from 
the representations of Dr. Hawkins, Mr. Burns, Mr. Clegg, 
Colonel Heck, C. L. Harris, and others. I did not possess much 
knowledge of the lands myself, and was governed by the 
opinions of others. Mr. Barns was opposed to the purchase of 
the 8,000 acre tract, because it was too much land tor the pur- 
pose. The other parties recommended it as a good location 
for the Penitentiary. We paid two visits to the place for the 
purpose of examinination for a location, but I never went on 
the larger tract at any time. All the members of the com- 



&20 Document No. 11. [Bessio* 

mittee were present, I think, except Jas. II. Harris. C. L. 
Harris, Superintendent of Public Works, was also present 
Col. Heck was present on the first visit, but am not certain 
that he was there the second time. I met Dr. Hawkins on the 
streets of Raleigh, and asked him myself about the location for 
the- Penitentiary, and the purchase. He said he thought it 
would be a good place to locate the Penitentiary and that it 
was a great mineral region, and that a Railroad would pass 
through it, and immediately by the Penitentiary, affording 
every facility for the transportation of the convicts, as well as 
the productions of tne country. 

Q. Who did you onderstanding to be the owner of tin.-, pro- 
perty, and from whom did you understand it '. 

A. Dr. Hawkins and Col. Heck. 1 understood it from < . 
Ji. Harris. 

Q. Who conducted the negotiation principally, on the part 
of the committee, and with whom, and was there any neso- 
tiation with Pruyn '. 

A. I think Col. Harris as fai as I could understand, was the 
chief manager on the part of the committee. I do not know 
who was the chief party on the other side. I never heard 
L'ruyn's name mentioned in connection with the negotiation 

Q. Did Littlefield or Swepson have any connection with the 
matter \ 

A. Not to my knowledge. 

Q. Do yon know whether an}' member of the committee got 
any money, or any thing of value for locating the penitentiary ( 

A. I do not. I never heard of it until afterwards, when I 
saw it charged in the newspaper.-. 

Q. Do you know of any member of the Convention or of 
the Legislature oi 1868 '69, receiving any money, bonds, pro- 
ceeds of bonds, or any thing of value, to influence his action 
in procuring the passage oi any bill or ordinance through 

either of those bodi< 
A. I do not. 



1871-72.] Document No. 11. 521 

Q. Was not Gen. Littlefield very active in procuring the pas- 
sage of railroad bills through the Legislature ! 

A. I thought he was. 

Q. Did yon obtain any money from him or Mr. Swepson 
during the years 1868-69 ? If so, state date, amount and con- 
sideration. 

A. I did borrow $1,000 from Mr. Swepson, I think in the 
latter part of 1S68, or early in 1869. I gave him my note 
with M. S. Littlefield and J. H. Harris as securities, which note 
is still unpaid. When Col. Deweese was candidate for Con- 
gress in the fall of 1S6S, he gave me an order on the Raleigh 
JNational Bank for $500, which was cashed by the bank, which 
sum was to be used in the campaign in Warren, Granville and 
Franklin. I never received any other money, to my knowl- 
edge, from either Swepson or Litilefield. 

Q. Did Swepson or Littlefield take up the note for a thon- 
sand dollars for tou, or any other note? 

A. Not to my knowledge. This note for a thousand dollars 
was payable to Swepson individually, and was payable one day 
after date at six per cent, interest. I never paid any part of it. 

Q. Was there any understanding between you and Swep- 
son that that note was not to be paid, or how it was to be 
paid ? 

A. I was to pay it as soon as I could make the money. 

Q. Has payment been demanded by Swepson or any on* 
else ? 

A. In December, 18G9, he asked me if I had got the money. 
or any part of it. I told him I had not. Nothing has been 
said about it since. 

Q. Did you not get $500 from Mr. Swepson or his elerk in 
October, 1868, $500 January 11th, i860, $500 January 30th. 
1869, and $600 April 5th r 1869, making in all $2,100? 

A. I got $500 from Mr. Swepson twice, and gave him two 
separate notes. I do not remember the dates, but suppose 
they are correctly given. This is the same thousand dollars 
that I spoke of before. I also got $500 in the fall of 1868, on 



hii Document No. 11. S< ssioa 

the order ot Deweese as above stated. I do not remember 
whether the order of Deweese was on Swepson or on the bank. 
[ also borrowed some money from Littlefield, all of which 1 
paid back. I also got other $250 or S.*'>00 from Littlefield for 

campaign purposes, which was not intended to be paid back. 
which was in the campaign of '08. I do not remember the 
$000 charged in April, 1809, and I got no other money from 
either Swepson or Littlefield, except as above stated. 

JOHN A HYMAN. 
Sworn to and subscribed before the Commission. 



Ralkigii, Sept. 15th, 1871. 

(ien. J. C. Abbott appeared, was sworn and testified. 

Q. AVere you a member of the Convention and of the Leg- 
islature of 1868-'69 I 

A. I was a member of the Convention. The Legislature 
met the 1 fit day of July and organized. I resigned the 16th, 
day of July, the day after I was elected Senator. 

Q. Do you know of any money, bonds, proceeds of bond.-, 
or anything of value, having been paid or offered to any mem- 
ber of the Convention or of the Legislature, to influence his 
action in procuring the passage of any ordinance or bill through 
either oi those bodies, or fur any other purpose whatsoever? ( >r 
to any State official or other officers for like objects? 

A. I (In no!-. I introduced the ordinance making appropria- 
tion to the V.'. ('. & R. M. Co.. into the Convention, and advo- 
cated the same as a member of that body. I do not know ot' 
the payment of any member of the Convention, but T remem- 
ber on one occasion that Mr. Deweese was in my room with 
I '. Cowan, and Mr. Porter of the firm of Soulier & Co.. ot 
New York. The bill was brought up and discussed freely. 
Difficulties were constantly springing up to embarrass its pas- 
through the Convention, and that was the subject ot our 



1871-'72.] Document No. 11. 828 

conversation, and we were discussing' the best means of getting it 
through. In the course of the conversation, Deweese said that 
it could not pass unless he was paid, and he demanded a fee of 
$7,000 to be paid to him before the ordinance could pass. Col. 
Cowan and Mr. Porter became exasperated at the way Deweese 
talked, and the latter scon after left the room, and I do not 
know that any amount was ever paid to hira or other person. 
The ordinance passed the Convention about two weeks alter its 
introduction. The bill met with serious opposition from Col. 
Ilea ton,, Judge Tourgee, Mr. Sweet and perhaps others. None 
of these gentlemen changed their opinion in their vote on the 
final passage of the ordinance, as I now remember. 

Q. Have you had any conversation with members of the 
Convention or Legislature or other- persons, in which they 
stated or admitted, that they had used or received money, bonds 
or other things to procure the passage of any bill or ordinance 
through the Legislature or Convention making appropriations 
to railroads or for other purposes ? 

A. I have not. 

Q. Did you receive from Mr. Swepson or Lit tie field in the 
year 18G9, various sums of money or bonds, amounting in the 
aggregate to 20 or $25,000 ? If so, state the consideration of 
the same, and give the commission a full explanation of the cir- 
cumstances attending the payment. 

A^ I received from Mr. Swepson $25,000 in different pay- 
ments. I think it was in the year 1SG9. The money was paid 
to me by Swepson for Littlefield in satisfaction of an unsettled 
account between myself and Littlefield. The account originated 
in this way. Previous to the assembling of the Constitutional 
Convention, feeling certain that the old State bonds would 
appreciate by the action of the Convention, I made a contract 
with Littlelieid and fiveothei persons, to wit : Messrs. French, 
Estes, Calvin Littlefield. Mr. Clark, of New York, and Mr. 
Winslow, of New York, to purchase a large amount of these 
bonds and re-sell them on the; rise. A large amount, as I 
understood was bought and re-sold at a considerable profit after 



524: Document No. 11. [Session 

the passage of the ordinance, acknowledging the validity of the 
public debt. I made frequent demands on Gen. Littlefield for 
a settlement, and payment to me of my share ot the profits. 
No settlement occurred until the spring of 1869, when it waa 
agreed that Swepson was to pay me this amount of $25,000. 
which Swepson paid about the dates specified in the account 
furnished by him to the Commission. 

Q. Do vou remember anything of the items charged against 
M. S. Littlefield and others, Jan. Oth, is.;:). $2,851.12 and the 
other $1,500 Jan. 21st, and negotiated by E. Burroughs <>f 
Wilmington, and discounted by Swepson ! 

A. I have no definite recollection of any particulars of the 
transaction. 

Q. Do you know the objects of this investigation ? If you 
know anything in the scope of its objects, please state it fully 
to the Commission ? 

A. I know nothing farther than I have stated. 

JOSEPH 0. ABBOTT. 

Sworn to and subscribed before the Commission. 



September 25th, 1871. 

Jas. H. Harris recalled and sworn : 

Q. Did you receive any money from John T. Deweese '. W 
so, how much, and at what time, and what was the considera- 
tion ? 

A. I received $1,000. I do not exactly remember, but think 
it was sometime in the spring of 1809, or perhaps in the latter 
part of the winter of that year. It was shortly before I re 
ceived tin note for $4 ,,(, <> from Swepson. 1 understood that 
this was the proportion of Deweese in the purse to be made 
up to me in consideration of my having withdrawn my name 
an a candidate for Congress, and for sei vices rendered to th» 
party as heretofore stated. 



1871-72.] Document No. 11. 526* 

Q. Did not Gen. Littlefield give you a draft on the bank or 
Mr. Swepson for %~>Si)^, or about that sum. some short time 
previons to February 27th, I860, or on that date? 

A. He did give such a draft at that or any other time. 

Q. Did Swepson not pay you that amount by a note, cash 
or otherwise about that time ? 

A. I have stated in my previous examination, that Swep- 
son gave a note for $4,000. I do not remember, and cannot 
give any definite information about the $1,850, and am satis- 
fied that it is clearly a mistake. 

Q. Did Gen. Littlefield give you a check about that time, 
or some time previous, for $S0O or thereabouts ? 

A. I have no recollection ot his giving me at any time a 
check for any such amount. He did give me checks for cam- 
paign purposes, the dates of which I do not clearly remember. 
I recollect on one occasion he gave me a check for those pur- 
poses ior $400, or thereabouts, which was sometime in the 
early part ot 1869 for expenses incurred in 1868. 

Q. Do you remember receiving from Swepson on the 21et 
February, 1869, or thereabouts, the sum of $600 ( the l6t of 
February, 1S69, the sum ot $500, on the 13th of January 
$500, or on October 11th, 1868, the sum ot $50 1 It so, state 
what it was tor. 

A. 1 do not remember getting any sums trom Mr. Swepson 
ou or about those dates. Upon reflection, I think the note 
before spoken ot was for $4,500, and not for $4,000 as stated. 

J. H. HARRIS. 

Sworn to and subscribed before the Commission. 



Raleigh, October 5, 1871. 

l\. Eppes appeared, was sworn and testified : 
Q. Were you a member of the Constitutional Convention of 
1868, and of the Legislature of 1868-'69 I 



526 Document No. 11. Session 

A . ! was. 

Q. Do you know, or have you beard, of any money, bonds, 
proc londs or anything oi value, being given, lent or 

offered to any member oi the Convention or of the Legislature, 
or to any State official, or to any officer of a rai d in which 
the State had an interest, toinfluence his official action, or for 

y other purpose? 

A. I know nothing, and have heard nothing beyond general 
rumors. 

(}. Did you receive; any moneys from Swepson or Littlefield 
about February, 1869 ? It' bo, state how much, and the con- 
sideration thereof. 

A. I never got any money horn either Swepson or Little- 
field. Some time in the early part of L869 I went into the 
bank to see if I could get a small amount oi money. I lacked 
a small sum to make enough with what I had to pay for a 
piece of land I had bought in Halifax. The clerk ot the bank 
went back into the bank and presently came out and handed 
me a note to sign lor about ninety or one hundred dollars. I 
signed it, and he gave me the money for it. Jusl before that 
time I had seen Mr. Swepson and asked him it there was any 
chance for me to borrow any money at the bank. He said he 
did not know, as ii was rather hard times at the bank, but to 
come down and see, and he reckoned they would let me have 
what I wanted. I gave no security to the note, and have not 
since paid it. It has never been presented. I do not rernem 
Iter whether it was payable to Mr. Swepson or to the bank. 
I think it was payable to the bank, because 1 had given one 
before payable to the bank, upon which Gen. Abbott was 
-■i enrity, and which was paid when present) 1. 

Q. J)o you know of anything else embraced in the object | 

of this investigation I 
A. I do not. 

1IENHY EPPES. 



1871-72.] Document No. 11. 527 

November 10th, 1871. 

Gen. L. G. Estes appeared, was sworn and testified : 
Q. Were you a member of the Legislature ot 1808-"' 
A. I was during the special session ot 1SG8, and of th« 
sessions of 1S6S-G9, resigning in July, 1801). 

Q. Do you know of any money, bonds, proceeds of bond* 
or anything of value being given, offered or loaned to any 
member of the Legislature or Convention, or to any State offi- 
cial whatever, or officers of any railroad corporation, in which 
the State has an interest, to influence his action in procuring 
the passage of an act making appropriations to railroads or 
tor other purposes, through the Legislature, or Convention, or 
have you any information on the subject ? 

A. Yes, I paid some money to influence the action of th« 
('(invention to secure their influence in procuring the passage 
of certain ordinances through that body. 1 paid John T. 
Deweese $2,500 to be divided between himself and Byron 
Laflin to secure Laflin's vote and influence on a bill providing 
for the issue ot $1,000,000 of bonds to the Wilmington, Char- 
lotte and Rutherford Railroad. G. W. Swepson told me that 
he had agreed to pay to Dr. Sloan 15 or 20 State bonds to 
withdraw his (Sloan's) opposition to the passsge ot the bill for 
the benefit of the Atlantic, Tennessee & Ohio Railroad, or for 
his aid in the passage of that bill, I don't remember which. 
Mr. Swepson offered me $10,000 or $12,000 of these bonds if 
1 would withdraw an amendment to the same bill, which I 
had offered, and which I refused to do, and I never received 
any bonds of that railroad from Mr. Swepson or any one else. 
This amendment had reference to the guage of the road. I 
do not know whether it finally passed or not. I know ot no 
other instance of money having been paid, loaned or offered to 
any member of the Convention or Legislature, or any other 
person, to influence his official action. 

Q. Do you know of any agreement or understanding between 
the presidents of the railroad companies or any one or more of 



"a 28 Documknt Xo. 11. [Session 

them, and Gen. Littlefield or any other party by which he or 
they were to receive a curtain compensation for getting bills 
making appropriations to such railroad companies through the 
Legislature ' 

A. I do nut. 

Q. State all the circumstances connected with the passage of 
the bill amending the charter of the W. C. & K. It. Co., and 
state whether any money bunds or other things of value was 
paid to procure the passage of said bill ? 

A. T know of no money paid offered or promised to procure 
the passage of the bill. It was in charge principally of Air. 
French and myself. It was put in the omnibus bill with the 
other railroad bills and passed with them. 

Q. Did you vote for the appropriations to all these railroads, 
which passed at the special session of 1S6S and the first session 
of lSGS-'Gt), and did you receive any compensation in any way 
for advocac-y of such bills ? Do you know of any compensation 
in any way whatever, direct or indirect, being given, promised 
or offered to any one, for his aid in procuring the passage of 
said bills I 

A. I did not vote for all ; I voted for only a part of them. I 
never received a dollar or paid a dollar, and know of no one 
who received a dollar or paid a dollar for the passage of any 
bill through the General Assembly. 

Q. AVas the money paid by you to .J. T. Deweese as previ- 
ously stated, furnished from your own mean.-, or by other 
parties, and if by others, by whom, and from what sources de- 
rived to the best of your information ? 

A. I paid it from my own means, but the amount was after- 
wards placed to my credit with Soiitter & Co., in New York, 
by Soutter & Co., on their books. Whether they received 
Compensation from other parties I do not know. 

Q. At whose requestor suggestion did you pay this money 
to Deweese ? 

A. At the suggestion of no one outside of the agreement be- 
tween mvself and Deweese. 



1871-72.] Document No. 11. 520 

Q. State the agreement between yourself and Deweese ! 

A. I agreed to pay Deweese $2,500 if the bill passed, to be 
divided between him and Laflin. 

Q. Did you have any conversation or communication with 
any one in reference to the demand of Deweese for the pay- 
ment of the $2,500, and of your agreement with him to pay it, 
either before or after the agreement to pay it, or after it was 
paid ? If so, state with whom, and all the circumstances con- 
nected with it, and give the subject of such conversation. 

A. I stated to Mr. Porter, of the firm of Sontter & Co., that 
1 had paid a certain amount of money to secure the passage 
of the bill, which I expected them to return, or something to 
that effect. I do not know what his reply wss. He placed 
the amount to my credit on the books of the firm in New York. 
This conversation was some time after the passage of the bill, 
and it was in this conversation he said this money would be 
placed to my credit. I had no communication with any other 
person on this subject. 

Q. What interest had you and Sontter <fe Co. in the passage 
of this bill ? 

A. I had no interest, except that 1 was the Representative 
of that section of the State benefitted by the road, and Soutter 
& Co. were the financial agents of the Road in New York. 

Q. Was Mr. Porter present in Raleigh during the pendency 
of the bill, and did he take any part in the passage of the bill 
through the Convention, so far as you know? 

A. He was present and was anxious for the passage of th« 
bill. 

Q. Did you not receive from G. W. Swepson or from M. S. 
Littlefield, one or both of them, on or about the 6th of March, 
1869, $5,000 ; also on the .same date, $5,000; also on the 15th 
of June, $3,000 ; also on the 17th of June, in connection with 
Mr. French. $20,913.74? It so, state the consideration of 
these different sums, and all the circumstances connected 
therewith. State also any other Minis received by you from 

34 



K30 I), dumbwt No. ll. [Sewioa 

Swepson or Littlefield, with the consideration for such bui 
and the circumstances connected with their reception. 

A. I never received a dollar from G. W. S n or M. S. 

Littlefield, or any other person, to secure my influence or my 

vote in the p any bill before the Legislature. J had 

Frequent private transactions with Littlefield, in which he 
•, R r money borrowed, two drafts, amounting- to S5,000 
each, on March Oth, 1SG9, endorsed by G. W. Swepson, which 
I had discounted at the State National Bank, and received 
the money. I was afterwards sued for the amount of these 
two drafts in Wake County Court by said bank, and judgment 
obtained against me. These drafts were paid by M. S. 
Littlefield and myself. I also had private transactions with 
G. W. Swepson, in which he endorsed my note for $10,450.87, 
payable at the office of Soutter & Co., New York, and gave 
him collateral security to the value of $15,000. The note 
has never been paid by me and Mr. Swepson has the collateral 
ae surity at this time. Mr. Swepson has never returned the 
coll iteral security, and has it, still, if not disposed of by him. 
I endorsed at the same time, for G. Z. French, with Mr. 
Swepson, a draft for a like amount — $10,456.87. Mr. Swep- 
son als i endorsed for me a note for $3,000, payable at thw 
office of J. G. Burr cv; Co., Wilmington, having satisfied him- 
', as he said, that the collateral security previously given 
was sufficienl to bi cure him against loss for the endorsement 
'■ drafts. M. S. Littlefield did not know oi Mr. Swep 
son endorsing this paper for either myself or Mr. French. 
It was a private transaction between Mr. Swepson, Mr. French 
and myself. Littlefield claimed, however, thai he paid my 
drafts, and that he has now the collateral security for the two 
above. The endorsement of the notes by Mr. Swepson was 
r my accommodation, to enable me to obtain the money on 
them. I do not knew whether or not ^Ir. French lias paid 
the amount. $10,456.87, endorsed by me at the same time. I 
file herewith copies of two letters received by me from Mr. 
Swepson, referring to matters contained in this answer. Th« 



1871-72.] 'Document No. 11 531 

costs of the suit mentioned in one of the letters was paid 
by me. 

Q. Did you request Gen. Littlefield to take up these papers 
or not, and do you know of any understanding between him 
and Swepson connected therewith? 

A. I did not request him to do so, and I know ot no under- 
standing between him and Swepson connected therewith. 

Q. Has Gen. Littlefield informed you that he 1ms taken up 
these papers from Mr. Swepson, and has he demanded any 
settlement or payment upon them ? Tf not, has he given you 
any information on the subject? 

A. He has not. 

Q. Did you have any transactions in special tax bonds in 
I860? 

A. I did not. 

Q. Did you have transactions in old N. C. State bonds ? If 
so with whom, and who were the managing parties in the trans- 
actions? 

A. I did have, but they were ot a strictly private nature, 
and in connection with no one in the State except Mr. French, 
and that in a single instance. I never had any transaction in. 
these bonds in connection with Gen. Littlefield while he was 
in the State. The transaction with Mr. French, to which I 
refer was soon after the decision of the Supreme Court in what 
was known as the Chatham Railroad suit. On reflection, T 
think I did have other transactions in bonds with Mr. French, 
and with Gen. Abbott, and with others, during the Conven- 
tion. The money I speak ot as having been obtained on the 
notes endorsed by Mr. Swepson, was obtained for my own 
private purposes. 

Q. State any other facts you may know, which may give in- 
lormation upon the objects of this investigation, or which may 
throw any light upon it, and of which you are now informed '. 

A. I know of nothing further, and have no other intorma- 
tion than I have already stated. L. G. ESTES. 

Sworn to and subscribed before the Commission. 



£32 Document No. 11. [Session 

Raleigh, September 8, 1871. 

Mr. ('. If. Beogden, appeared, was sworn and testified : 

Q. I)., you know of any money, bonds, proceeds of bonds, 
or any thing of value, having been paid to any member of the 
Legislature, or ot the Convention, to influence their action in 
procuring the passage of any hill or ordinance through either 
of those bodies ? 

A. I was a member of the Legislature of 1868-'69, and 
know nothing ot an}' such transaction. I heard nothing ot 
the kind except what appeared in the newspapers at the time. 

Q. Were you the owner of any State bonds in the year 
L868- '70 ' If so, how man} - , and from whom did you procure 
the same ( 

A. I owned none in 1SG0. I authorized John G. Williams 
to purchase two of the "funded interest class/' which he did 
in the latter part of December, 18G0, and who delivered them 
to roe shortly afterwards. These are the only bonds I bought 
since the war, except two old North Carolina bonds which I 
bought in 1867. I never owned one of the special tax bonds, 
and never had one in m\ possession. 

Q. Do you remember having a conversation with L. W. 
Humphrey in which you proposed to hypothecate a number of 
bonds with him if he would become your Burety upon a 
bond to be given to the United States as a revenue officer* If 
♦so, state the substance of the conversation I 

A. I called to sec Col. Humphrey early in January, 1870, 
in order to take up a note which he had against me. After 
paying tin: note, Col. Humphrey asked me if I was not going 
to accept the office ot revenue collector for the second district, 
to which I had been appointed. I remarked that I thought I 
had better have nothing to do with it, that I had never deter- 
mined to accept the office. Col. Humphrey then .-aid to me 
he thought I had better accept it, as he thought it would pay 
me very well. I then asked Col. II. if he would be williug to 
sign my bond with me, it 1 were to determine to accept the 



1871-72.] Document No. 11. 533 

office, if I were to deposit $10,000 of bonds as collateral 
security to indemnify him against any possible loss. lie imme 
diately declined to do so. I did not have the ten bonds at 
that time, and I merely made the suggestion in jest, and not 
in reality, not having any idea of accepting the office. 

Q. Do you remember being present at an entertainment 
given at the National Hotel during the latter part of the ses- 
sion of 1SG9-70, at which there was a number of persons 
present, and at which time there was a discussion upon the 
question of repealing the resolution appointing the Bragg 
Committee 1 If so, state what occurred, according to your 
best recollection ? 

A. I was present by invitation of the Senator trom Craven 
and Carteret, W. A. Moore, who had spoken to me several 
times about the propriety of the Republican members from 
our congressional district having a little meeting before we 
separated, relative to determing the time and place of holding 
our congressional district convention. And from what Col. 
Moore had previously said to me on that subject, I supposed 
when he invited me to his room the night in question, that it 
was to consult relative to holding our district convention. 
When I called at Col. Moore's room I found several gentle- 
men theie, and among them several Hepublican Senators. 
The question of repealing the Bragg Committee was mentioned 
and l think it was agreed by a majority of the Senators present 
that they would vote to repeal it on the next day. But I heard 
no offer or propositions of any money, or any thing else, made 
directly or indirectly, to any Senator for any vote he had given 
or might give, on that, or any other question. 

Q. Was Gen. Littlefield present, and what part did he take 
in the meeting ? 

A. He was not present when I first met the gentlemen at 
Col. Moore's room, but before ih<' meeting dispersed, he came 
in and t >ok a glass of wine with his friends, and remarked 
to them, " that if they knew as much about that Bragg com- 
mittee as he did, they would vote to repeal it the next day." 



534 Document No. 11. [Session 

But I never heard him offer money or anything elee to any 
Senator for any to te he had ever given, or that ho desired 
him to give, on any question. 

C. H. BROGDEN. 
Sworn t) and subscribed befne the Commission. 



Raleigh, September 18th, 1871. 

Mr. J. G. Hesteb appeared, was sworn and testiiied : 

Q. Do you know of any money, bonds, proceeds of bonds. 
or anything of value paid to any member of the Legislature, 
officers oi the State government, or other persons, to influence 
their action in the passage of any bill through the Legislature, 
or in any other way, or for any other purpose, whatever ? 

A. I know nothing of that kind. 

Q. Do you know of any money or other thing of value 
belonging to the State, being used by any State officer at any 
time since May, 1865, improperly, and for his own use and 
benefit ? 

A. In the month of October, ISO!*, the Secretary of State. 
Mr. JI. J. Menninger, came to me on Fayetteville Street, in 
the city of Raleigh, at the store of E. Via, and asked me the 
price of carpets. I showed him a sample and told him the 
price was $2.25 per yard. He said he wanted a large bill for 
the State, some 500 yards, and wished to know if I could not 
put it at a lees price. I told him if he would take that amount, 
I would put it at $1.93. Be gave me no answer at that time 
whether he would take it or not. He came again the next 
day. or a day or two afterwards, and nought two setts of china, 

one table Betl and one bed r u sett for $130, and asked me 

to send them up to his house. I did so. lie went out with- 
out saying anything about paying for them at that time; nor 
did he say anything more about the carpet. The next day, or 
soon after, he came in and said he would take 500 yards of 



1871-'7f.] Document No. 11 53& 

earpet at the price agreed upon — $1.93. lie went into my 
private office, and asked me to come in, and I did so. He 
asked me if I knew the difference between "tweedle dum and 
and tweedledee." I told him I did not. He made some figure* 
on a little piece of paper with a pencil, 219 multiplied by 5, 
which I nnderstoodd to be a proposition on his part to pay me 
$2.19 a yard for the carpet which I had offered for $1.93, as 
it made the difference between the two sums, which was the 
price of the china he had bought, and said that was the differ- 
ence between "tweedle dum and tweedle dee." I told him all 
I wanted was the money for the china and the carpet, and he 
could pay it as he pleased, in State warrants or out of his 
pockets. He gave me a warrant on the State Treasurer for 
the amount of 500 yards at $2.19, saying he wanted it made 
out in that way, and he would 6ettle his own matter with the 
State. I afterwards got the money, as manager for E. Via, on 
the warrant as above stated. J. G. HESTER. 

Sworn to and subscribed before the Commission. 



Sefiemher 18th, 1871. 

Mr. August Doepp appeared, was sworn, and testified : 

Q. State your present business, and where and what wai 
your occupation in the year 1869 ? 

A. A druggist in the city of Raleigh. I pursued the same 
business of Brooklyn in the year 18G9, under the firm name of 
August Doepp. 

Q. Do you know the firm purporting to do business under 
the name of Augustus Doepp it Co., Brokers and Commis- 
sion Merchants, No. 305 Pearl street, New York, during the 
year 18G9 >. 

A. I do not. I never dealt in stationery of any soit, and 
never furnished any for the State. 

AUGUST DOEPP. 

Sworn to and subscribed before the Commission. 



63fi Document No. 11. [Session 

Ralbigh, Sept. 19th, 1871. 

Dr. W. J. Hawkins appeared, was sworn and testified. 
Q. Who were the stockholders in the Deep River Manufac- 
turing Company in 1869 1 

A. I do not know. I have never had any interest in it my- 
self. 

Q. Did yon have any interest in the sale of the site for the 
Penitentiary on Deep River, or in the 8,000 acres of land I 

A. I had no other interest in it than as stockholder and 
manager of the Chatham Railroad. I did believe that the site 
was the most suitable among those under consideration. I was 
exceedingly anxious to have the Penitentiary located on the 
line of the Chatham Railroad, believing it would be a perpetual 
aoiuce of revenue to that road, and for the further reason that it 
was the beat for the interest of the State. 

Q. Do you know anything about the negotiation and sale to 
the. State ol the various tracts, known as the 8,000 acres '. 

A. I do not of my own knowledge. I knew that there was 
a negotiation ^oing on tor the S,000 acres of land, between the 
Deep River Co., and Pruyn, and when the contract was made. 
I was asked by Mr. Swcpson and Col. Heck rb guarantee the 
execution of the contract by the company, which I did with 
Mr. Swcpson. I was in the directors room ot the Raleigh .Na- 
tional Bank and was called upon by Swcpson and Col. Heck 
to endorse the contract referred to above and the impression 
made upon me there, was that this land was to be conveyed to 
the Stale by Pruyn. 

Q. Why was the sale made to Pruyn by the company, and 
ltj him to the State, instead oi directly by the company to the 
Stat 

A. I know nothing about it. 

<^. Did you have any conversation with John A. Efyman o\' 
the committee to locate the Penitentiary about the location, 
such as stated by him in his evidence which is now read to you? 

A. I have no recollection of any such conversation. I may 



1871-'72.] Document No. 11. »37 

have had, lor the location offered I considered the best in the 
State. I regard the land as valuable, but did not see the neces- 
sity of its purchase. 

Q. Do you know anything more connected with the Peni- 
tentiary negotiations or any other matter in any way involved 
in them ? 

A. I have no recollection of any other matter than what 1 
have stated above. 

Q. Do you know anything of any money, bonds, proceeds of 
bonds or anything of value, being given, loaned or offered to 
any member of the Legislature or